Define and discuss GDP
What will be an ideal response?
GDP is the market value of all final goods and services produced within a country in a given time period. Only final goods and services are included. Goods produced as intermediate goods are excluded. The goods and services must be produced within the time period under consideration and so sales of used goods are excluded. The goods and services also are those produced within the country, so production by the country's firms that takes place in a foreign nation is not included.
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If the dollar depreciates relative to other currencies, which of the following is true? a. It takes more of the other currency to buy a dollar
b. It takes less of the other currency to buy a dollar. c. There is no change in the amount of the currency needed to buy a dollar. d. Not enough information to determine.
Real income for a given year would be less than nominal income in that year if:
A. the consumer price index was less than 100 in that year. B. nominal income in that year was greater than nominal income in the previous year. C. nominal income in that year was less than nominal income in the previous year. D. the consumer price index was greater than 100 in that year.
Compared with a low benefit reduction rate, a relatively high benefit reduction rate in a cash assistance program:
A. reduces the incentive to work. B. increases the incentive to work. C. does not affect the incentive to work. D. will reduce the incentive to work through the substitution effect but will increase the incentive to work through the income effect.
Two firms, Alpha and Beta, produce identical computer hard drives. They have identical costs, and the hard drives they produce are identical. The industry is a natural duopoly
Alpha and Beta enter into a collusive agreement, according to which they split the market equally. If both firms comply with the agreement A) together they will operate in a way indistinguishable from a monopoly. B) the price of a hard drive will be equal to marginal cost. C) each firm will make zero economic profit. D) the oligopoly will produce more hard drives than a profit-maximizing monopoly would produce.