If real Gross Domestic Product (GDP) is above its equilibrium level
A. firms accumulate unplanned inventories.
B. planned investment is greater than planned saving.
C. firms are not maximizing their profits.
D. planned consumption is less than actual consumption.
Answer: A
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If the Citrus Growers Association grows $1 million worth of oranges, sells $500,000 worth of oranges to consumers, uses the rest to make orange juice that is sold to consumers for $3 million, Citrus Grower's contribution to GDP is:
A. $3,500,000. B. $500,000. C. $4,000,000. D. $1,000,000.
Joe and Frank are partners in a delivery business. Their only business asset is the truck they use for deliveries, which is jointly owned by the partners. Frank, while on a business run, speeds through a red light, hits a car, and causes personal injury to the car owner of $150,000 . In the apportionment of liability for this injury among the partners
a. the most that could be taken from Joe is his half-ownership in the truck b. the most that can be taken from Joe is $75,000 c. Joe is not liable at all since he was not the driver d. Joe could be required to pay the full $150,000 in damages e. Joe would be liable only for the amount of profit earned in the trucking business
Many economists argue that real GDP is NOT a good measure of economic well-being because
A. it includes the taxes we pay to the federal government. B. it excludes the environmental quality of life. C. it overvalues the increases in nonmarket transactions. D. it excludes Social Security payments made to retirees.
To prevent the dollar from depreciating, the U.S. central bank can try to fix the currency value of the dollar when they
A. buy foreign currencies in the foreign exchange market. B. sell U.S. dollars in the foreign exchange market. C. abandon the U.S. dollar and use another country's currency as its legal currency. D. buy U.S. dollars in the foreign exchange market.