Macroeconomics final
Refer to the above data. The net domestic product is: A. $233. B. $255. C. $230. D. $348.
B. $255.
Refer to the diagram below. Total revenue at price P1 is indicated by area(s): A. C + D B. A + B C. A + C D. A
B. A + B
In which of these instances is demand said to be perfectly inelastic? A. An increase in price of 2% causes a decrease in quantity demanded by 2% B. A decrease in price by 2% causes an increase of quantity demanded of 0% C. A decrease in price of 2% causes a decrease in total revenue of 0% D. An increase in price of 2% causes a decrease in quantity demanded of 12%
B. A decrease in price by 2% causes an increase of quantity demanded of 0%
Economists face an obstacle that many other scientists do not face. What is that obstacle? A. It is often difficult to formulate theories in economics. B. It is often impractical to perform experiments in economics. C. Economics cannot be addressed objectively; it must be addressed subjectively. D. The scientific method cannot be applied to the study of economics.
B. It is often impractical to perform experiments in economics.
The main determinant of elasticity of supply is the: A. number of close substitutes for the product available to consumers B. amount of time the producer has to adjust inputs in response to a price change C. urgency of consumer wants for the product D. number of uses for the product
B. amount of time the producer has to adjust inputs in response to a price change
Economic scarcity: A. is peculiar to the United States economy. B. applies to all economies. C. is peculiar to command systems. D. is peculiar to market systems.
B. applies to all economies.
Digital cameras and memory cards are: A. substitute goods B. complementary goods C. independent goods D. inferior goods
B. complementary goods
Because every transaction has a buyer and a seller, A. GDP is more closely associated with an economy's income than it is with an economy's expenditure. B. every transaction contributes equally to an economy's income and to its expenditure. C. the number of firms must be equal to the number of households in a simple circular-flow diagram. D. firms' profits are necessarily zero in a simple circular-flow diagram.
B. every transaction contributes equally to an economy's income and to its expenditure.
One can say with certainty that equilibrium price will decline when supply: A. and demand both decrease B. increases and demand decreases C. decreases and demand increases D. and demand both increase
B. increases and demand decreases
Broadly defined, competition involves: A. private property and freedom of expression. B. independently acting buyers and sellers and freedom to enter or leave markets. C. increasing opportunity costs and diminishing marginal utility. D. capital goods and division of labor.
B. independently acting buyers and sellers and freedom to enter or leave markets.
Refer to the above diagram. (resource flow diagram from question 22&23) Which of the following items flows from households to firms through the resource markets? A. goods and services B. land, labor, and capital C. dollars spent on goods and services D. wages, rent, and profit
B. land, labor, and capital
Growth is advantageous to a nation because it: A. promotes faster population growth. B. lessens the burden of scarcity. C. eliminates the economizing problem. D. slows the growth of wants.
B. lessens the burden of scarcity.
The value of the best alternative sacrificed to obtain something you want is referred to as A. explicit cost. B. opportunity cost. C. marginal cost. D. sunk cost.
B. opportunity cost.
The basic formula for the price elasticity of demand coefficient is: A. absolute decline in quantity demanded / absolute increase in price B. percentage change in quantity demanded / percentage change in price C. absolute decline in price / absolute increase in quantity demanded D. percentage change in price / percentage change in quantity demanded
B. percentage change in quantity demanded / percentage change in price
Perfectly inelastic demand implies that buyers: A. decrease their purchases when the price rises B. purchase the same amount as before when the price rises or falls C. increase their purchases only slightly when the price falls D. respond substantially to an increase in price
B. purchase the same amount as before when the price rises or falls
Economists believe that production possibilities frontiers are often bowed because A. trade-offs inevitably create unemployment. B. resources are not completely adaptable. C. opportunity costs are constant. D. of improvements in technology.
B. resources are not completely adaptable.
The price elasticity of supply measures how: A. easily labor and capital can be substituted for one another in the production process B. responsive the quantity supplied of X is to changes in the price of X C. responsive the quantity supplied of Y is to changes in the price of X D. responsive quantity supplied is to a change in incomes
B. responsive the quantity supplied of X is to changes in the price of X
Economics ay best be defined as the: A. interaction between macro and micro considerations. B. social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity. C. empirical testing of value judgments through the use of logic. D. use of policy to refute facts and hypotheses.
B. social science concerned with how individuals, institutions, and society make optimal choices under conditions of scarcity.
In the production of goods and services, trade-offs exist because A. not all production is efficient. B. society has only a limited amount of productive resources. C. buyers and sellers often must negotiate prices. D. human wants and needs are limited at a particular point in time.
B. society has only a limited amount of productive resources.
What are the two most important factors influencing investor preferences? A. the desire for high rates of return and the thrill of uncertainty B. the desire for high rates of return and the dislike of risk and uncertainty C. an equal balance of stocks and bonds, and high rates of return D. stable rates of return and balance between public and private sector financial assets
B. the desire for high rates of return and the dislike of risk and uncertainty
Employers will hire more units of a resource if: A. the price of the resource increases B. the productivity of the resource increases C. the price of the good being produced declines D. the price of a complementary resource rises
B. the productivity of the resource increases
In a market economy the distribution of output will be determined primarily by: A. consumer needs and preferences. B. the quantities and prices of the resources that households supply. C. government regulations that provide a minimum income for all. D. a social consensus as to what distribution of income is most equitable.
B. the quantities and prices of the resources that households supply.
It takes a considerable amount of time to increase the production of pork. This implies that: A. a change in the demand for pork will not affect its price in the short run B. the short-run supply curve for pork is less elastic than the long-run supply curve for pork C. an increase in the demand for pork will elicit a larger supply response in the short run than the long run D. the long-run supply curve for pork is less elastic than the short-run supply curve for pork
B. the short-run supply curve for pork is less elastic than the long-run supply curve for pork
If demand is price inelastic, then when price rises, total revenue: A. will fall B. will rise C. will remain unchanged D. may rise, fall, or remain unchanged. More information is needed to determine the change in total revenue with certainty
B. will rise
A manufacturer produces 1,000 units, regardless of the market price. For this firm, the price elasticity of supply is: A. infinity B. zero C. one D. negative one
B. zero
People are willing to pay more for a diamond than for a bottle of water because A.the marginal cost of producing an extra diamond far exceeds the marginal cost of producing an extra bottle of water. B.the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water. C. producers of diamonds have a much greater ability to manipulate diamond prices than producers of water have to manipulate water prices. D.water prices are held artificially low by governments, since water is necessary for life.
B.the marginal benefit of an extra diamond far exceeds the marginal benefit of an extra bottle of water.
Refer to the above data. Equilibrium price will be: A. $4 B. $3 C. $2 D. $1
C. $2
Refer to the above data. The gross domestic product is: A. $326. B. $282. C. $307. D. $300.
C. $307.
In its most ideal form, a price system allows: A. firms to act in such a way that they eliminate scarcity B. consumers to satisfy all their wants C. Resources to move from lower-valued uses to higher-valued uses through voluntary exchange D. government policy makers to allocate resources to the uses which they consider to be the in the best interests of society
C. Resources to move from lower-valued uses to higher-valued uses through voluntary exchange
Which of the following institutional arrangements is most likely to promote growth? A. Patents and copyrights that expire quickly and are loosely enforced. B. Strong government control over resource allocation decisions. C. Unrestricted trade between nations. D. All of these
C. Unrestricted trade between nations.
Which of the following statements best illustrates the concept of derived demand? A. as income goes up the demand for farm products will increase by a smaller relative amount B. a decline in the price of margarine will reduce the demand for butter C. a decline in the demand for shoes will cause the demand for leather to decline D. when the price for gasoline goes up, the demand for motor oil will decline
C. a decline in the demand for shoes will cause the demand for leather to decline
Which of the following is the least likely to be a competitive market? A. ice cream B. soybeans C. cable television D. new houses
C. cable television
All of the following are examples of physical capital EXCEPT A. buildings. B. machinery. C. company stocks and bonds. D. a hydroelectric power plant.
C. company stocks and bonds.
In national income accounting, consumption expenditures include: A. purchases of both new and used consumer goods. B. consumer durable goods and consumer nondurable goods, but not services. C. consumer durable goods, consumer nondurable goods, and services. D. changes in business inventories.
C. consumer durable goods, consumer nondurable goods, and services.
Which of the following concepts cannot be illustrated by the production possibilities frontier? A. efficiency B. opportunity cost C. equality D. trade-offs
C. equality
Refer to the above diagram. Flow (3) represents: A. wage, rent, interest, and profit income. B. land, labor, capital, and entrepreneurial ability. C. goods and services. D. consumer expenditures.
C. goods and services.
The simple circular flow model shows that: A. households are on the buying side of both product and resource markets. B. businesses are on the selling side of both product and resource markets. C. households are on the selling side of the resource market and on the buying side of the product market. D. businesses are on the buying side of the product market and on the selling side of the resource market.
C. households are on the selling side of the resource market and on the buying side of the product market.
The production possibilities frontier illustrates the basic principle that: A. the production of more of any one good will in time require smaller and smaller sacrifices of other goods. B. an economy will automatically obtain full employment of its resources. C. if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced. D. an economy's capacity to produce increases in proportion to its population size.
C. if all the resources of an economy are in use, more of one good can be produced only if less of another good is produced.
The achievement of full employment through time will: A. diminish labor productivity. B. reduce the level of investment as a percentage of GDP. C. increase the realized rate of economic growth. D. have no impact on the rate of economic growth.
C. increase the realized rate of economic growth.
Price ceiling and price floors: A. cause surpluses and shortages respectively B. make the rationing function of free markets more efficient C. interfere with the rationing function of prices D. shift the supply and demand curves and therefore have no effect on the rationing function of prices
C. interfere with the rationing function of prices
A market: A. reflects upsloping demand and downsloping supply curves B. entails the exchange of goods, but not services C. is an institution that brings together buyers and sellers D. always requires face-to-face contact between buyer and seller
C. is an institution that brings together buyers and sellers
The field of economics is traditionally divided into two broad subfields, A. national economics and international economics. B. consumer economics and producer economics. C. microeconomics and macroeconomics. D. private sector economics and public sector economics.
C. microeconomics and macroeconomics.
For economists, the word "utility" means: A. versatility and flexibility. B. rationality. C. pleasure and satisfaction. D. purposefulness.
C. pleasure and satisfaction.
In contrast to goods and services markets, _____________ are rare in labor markets, because rules that prevent people from earning income are not politically popular: A. minimum wages B. price floors C. price ceilings D. living wage laws
C. price ceilings
Suppose that when the price of wheat is $2 per bushel, farmers can sell 10 million bushels. When the price of wheat is $3 per bushel, farmers can sell 8 million bushels. Which of the following statements is true? The demand for wheat is: A. income inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers B. income elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers C. price inelastic, so an increase in in the price of wheat will increase the total revenue of wheat farmers D. price elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers
C. price inelastic, so an increase in in the price of wheat will increase the total revenue of wheat farmers
Tom Atoe grows tomatoes for home consumption. This activity is: A. excluded from GDP in order to avoid double counting. B. excluded from GDP because an intermediate good is involved. C. productive but is excluded from GDP because no market transaction occurs. D. included in GDP because it reflects production
C. productive but is excluded from GDP because no market transaction occurs.
A nation's infrastructure refers to: A. its ability to realize economies of scale. B. its stock of technological knowledge. C. public capital goods such as highways and sanitation systems. D. the productivity of its labor force
C. public capital goods such as highways and sanitation systems.
If we say a price is too high to clear the market, we mean that: A. quantity demanded exceeds quantity supplied B. the equilibrium price is above the current price C. quantity supplied exceeds quantity demanded D. the price of the good is likely to rise
C. quantity supplied exceeds quantity demanded
If intermediate goods and services were included in GDP: A. the GDP would then have to be deflated for changes in the price level. B. nominal GDP would exceed real GDP. C. the GDP would be overstated. D. the GDP would be understated.
C. the GDP would be overstated.
Scarcity refers to A. the ability of society to employ all of its resources. B. the ability of society to consume all that it produces. C. the inability of society to satisfy all human wants because of limited resources. D. the inability of society to eliminate poverty.
C. the inability of society to satisfy all human wants because of limited resources.
The presence of market failures implies that: A. money is not an effective tool for exchange in a market system. B. individuals and firms should strive to be self-sufficient rather than specialize. C. there is an active role for government, even in a market system. D. command systems are superior to market systems in the allocation of resources.
C. there is an active role for government, even in a market system.
Economists use some familiar terms in specialized ways A. to make the subject sound more complex than it is. B. because every respectable field of study has its own language. C. to provide a new and useful way of thinking about the world. D. because it was too difficult to come up with new terms.
C. to provide a new and useful way of thinking about the world.
Which of the following is an example of using the scientific method with a natural experiment? A. measuring how long it takes a marble to fall from a ten story building B. comparing plant growth with and without a soil additive C. tracking the price of oil when a war in the Middle East interrupts the flow of crude oil D. observing the reaction when two chemicals are mixed together
C. tracking the price of oil when a war in the Middle East interrupts the flow of crude oil
Suppose that the total revenue curve above is derived from a particular linear demand curve. That demand curve must be: A. inelastic for price declines that increase quantity demanded from 6 units to 7 units B. elastic for price declines that increase quantity demanded from 6 units to 7 units C. inelastic for price increases that reduce quantity demanded from 4 units to 3 units D. elastic for price increases that reduce quantity demanded from 8 units to 7 units
A. inelastic for price declines that increase quantity demanded from 6 units to 7 units
The problems of aggregate inflation and unemployment are: A. major topics of macroeconomics. B. not relevant to the U.S. economy. C. major topics of microeconomics. D. peculiar to command economies.
A. major topics of macroeconomics.
The GDP is the: A. monetary value of all final goods and services produced within a nation in a particular year. B. national income minus all nonincome charges against output. C. monetary value of all economic resources used in producing a year's output. D. monetary value of all goods and services, final and intermediate, produced in a specific year.
A. monetary value of all final goods and services produced within a nation in a particular year.
In calculating GDP, governmental transfer payments, such as social security or unemployment compensation, are: A. not counted. B. counted as investment spending. C. counted as government spending. D. counted as consumption spending.
A. not counted.
The law of demand states that: A. price and quantity demanded are inversely related B. the larger the number of buyers in the market, the lower will be product price C. price and quantity demanded are directly related D. consumers will buy more of a product at high prices than low prices
A. price and quantity demanded are inversely related
The law of supply indicates that, all other things equal: A. producers will offer more of a product at high prices than at low prices B. the product supply curve is downsloping C. consumers will purchase less of a good at high prices than at low prices D. producers will offer more of a product at low prices than at high prices
A. producers will offer more of a product at high prices than at low prices
Which of the following is a fundamental characteristic of the market system? A. property rights. B. central planning by government. C. unselfish behavior. D. government-set wages and prices.
A. property rights.
Suppose that there is an improvement in technology in the market for iPhones. Which of the following is true? A. supply will increase and the market clearing price will fall B. supply will increase and the market clearing price will rise C. demand will increase and the market clearing price will rise D. demand will increase and the market clearing price will fall
A. supply will increase and the market clearing price will fall
People always face trade-offs because A. they always have more than one use for their time and money. B. they buy goods with money. C. trading takes place in a market economy. D. they can make themselves better off through trade.
A. they always have more than one use for their time and money.
Refer to the above diagram. Flow (1) represents: A. wage, rent, interest, and profit income. B. land, labor, capital, and entrepreneurial ability. C. goods and services. D. consumer expenditures.
A. wage, rent, interest, and profit income.
The labor demand curve of a firm: A. will shift to the left if the price of the product the labor is producing falls B. is perfectly elastic if the firm is selling its product in a purely competitive market C. reflects a direct relationship between the number of workers hired and money wage rate D. is the same as its marginal product curve
A. will shift to the left if the price of the product the labor is producing falls
Present value is best defined as the: A. worth today of future expected returns or costs B. worth in the future of a current flow of returns or costs C. current worth of a financial asset purchased in the past D. expected future value of a financial asset purchased today
A. worth today of future expected returns or costs
The price elasticity of demand for widgets is 0.80. Assuming no change in the demand curve for widgets, a 16 percent in sales implies a: A. 1 percent reduction in price B. 12 percent reduction in price C. 40 percent reduction in price D. 20 percent reduction in price
D. 20 percent reduction in price
GDP is not a perfect measure of well-being; for example, A. GDP excludes the value of volunteer work. B. GDP does not address the distribution of income. C. GDP does not address environmental quality. D. All of the above are correct.
D. All of the above are correct.
Refer to the above diagram. This economy will experience unemployment if it produces at point: A. A. on curve B. B. on curve C. C. on curve D. D. inside the curve
D. D. inside the curve
Which of the following statements is correct? A. Economists almost always find it easy to conduct experiments in order to test their theories. B. Economics is not a true science because economists are not usually allowed to conduct experiments to test their theories. C. Economics is a social science rather than a true science because it cannot employ the scientific method. D. Economists are usually not able to conduct experiments, so they must rely on natural experiments offered by history.
D. Economists are usually not able to conduct experiments, so they must rely on natural experiments offered by history.
A rightward shift in the demand curve for product C might be caused by: A. an increase in income if C is an inferior good B. a decrease in income if C is a normal good C. a decrease in the price of a product that is a close substitute for C D. a decrease in the price of a product that is complementary to C
D. a decrease in the price of a product that is complementary to C
Refer to the above diagram. A price of $20 in this market will result in: A. a shortage of 50 units B. a surplus of 50 units C. a surplus of 100 units D. a shortage of 100 units
D. a shortage of 100 units
In the treatment of U.S. exports and imports, national income accountants: A. subtract exports, but add imports, in calculating GDP. B. subtract both exports and imports in calculating GDP. C. add both exports and imports in calculating GDP. D. add exports, but subtract imports, in calculating GDP.
D. add exports, but subtract imports, in calculating GDP.
Wage determination in labor markets is important because: A. wages are a major determinant of money incomes B. wages allocate scarce resources among alternative uses C. wages, along with labor productivity, are important to firms in minimizing their costs D. all of these reasons
D. all of these reasons
Bond payments are typically more predictable than stocks because: A. interest on bonds is not taxable B. stock prices and dividends exhibit little volatility C. bonds generate higher average rates of return D. bond owners know the size and timing of the payments they will receive
D. bond owners know the size and timing of the payments they will receive
If the economy's real GDP doubles in 18 years, we can: A. not say anything about the average annual rate of growth. B. conclude that its average annual rate of growth is about 5.5 percent. C. conclude that its average annual rate of growth is about 2 percent. D. conclude that its average annual rate of growth is about 4 percent.
D. conclude that its average annual rate of growth is about 4 percent.
Refer to the diagram below. The decline in price from P1 to P2 will: A. increase total revenue by D B. increase total revenue by B + D C. decrease total revenue by A D. decrease total revenue by D - A
D. decrease total revenue by D - A
If X is a normal good, a rise in money income will shift the: A. supply curve for X to the left B. supply curve for X to the right C. demand curve for X to the left D. demand curve for X to the right
D. demand curve for X to the right
Limited liability rules: A. mean that bankrupt companies owe nothing to corporate bondholders B. discourage investment in corporate stock C. help prevent corporate fraud D. encourage stock investing by limiting shareholder risk of loss
D. encourage stock investing by limiting shareholder risk of loss
Refer to the above diagram. If price falls from $10 to $2, total revenue: A. rises from A + B to A + B + C + D and demand is inelastic B. falls from A + D to B + C and demand is inelastic C. rises from C + D to B + A and demand is elastic D. falls from A + B to B + C and demand is inelastic
D. falls from A + B to B + C and demand is inelastic
What's the difference between economic and financial investments? A. financial investments are sensitive to interest rates, economic investments are not B. economic investments add to the capital stock of an economy, financial investments do not C. economic investments are reflected in real (inflation-adjusted) terms, financial investments are expressed in nominal terms D. financial investments include all purchases undertaken with the expectation of financial gain; economic investments include only purchases of new capital goods
D. financial investments include all purchases undertaken with the expectation of financial gain; economic investments include only purchases of new capital goods
GDP is a A. stock because it measures income for the entire country. B. stock because it measures wealth at a distinct point in time. C. flow because dollar values are used. D. flow because it measures income over a period of time.
D. flow because it measures income over a period of time.
Over time, the equilibrium price of a gigabyte of computer memory has fallen while the equilibrium quantity purchased has increased. Based on this we can conclude that: A. decreases in the demand for computer memory have exceeded increases in supply B. decreases in the supply of computer memory have exceeded increases in demand C. increases in the demand for computer memory have exceeded increases in supply D. increases in the supply of computer memory have exceeded increases in demand
D. increases in the supply of computer memory have exceeded increases in demand
Refer to the above diagram. (Diagram on question 27) Other things equal, this economy will achieve the most rapid rate of growth if: A. the ratio of capital to consumer goods is minimized. B. it chooses point C. lowest on ppc C. it chooses point B. middle on ppc D. it chooses point A. highest on ppc
D. it chooses point A. highest on ppc
A competitive market is a market in which: A. an auctioneer helps set prices and arrange sales B. there are only a few sellers C. the forces of supply and demand do not apply D. no individual buyer or seller has any significant impact on the market price
D. no individual buyer or seller has any significant impact on the market price
Assume that a 4 percent increase in income across the economy results in a 8 percent increase in the quantity demanded of good X. The coefficient of income elasticity of demand is: A. negative and therefore X is an inferior good B. negative and therefore X is a normal good C. positive and therefore X is an inferior good D. positive and therefore X is a normal good
D. positive and therefore X is a normal good
Suppose that an economy's labor productivity and total workerhours each grew by 3 percent between year 1 and year 2. We could conclude that this economy's: A. real GDP remained constant. B. capital stock increased by 3 percent. C. production possibilities curve shifted inward. D. production possibilities curve shifted outward.
D. production possibilities curve shifted outward.
A leftward shift of a product supply curve might be caused by: A. an improvement in the relevant technique of production B. a decline in the prices of needed inputs C. an increase in consumer incomes D. some firms leaving an industry
D. some firms leaving an industry
Diversifiable risk refers to risk: A. faced by a portfolio in general B. that can be reduced with appropriate fiscal and monetary policy C. posed by business cycle fluctuations D. specific to a particular investment
D. specific to a particular investment
The largest contributor to increases in the productivity of American labor is: A. the reallocation of labor from agriculture to manufacturing. B. improvements in labor quality. C. increases in the quantity of capital. D. technological advance.
D. technological advance.
The components of the expenditure approach to measuring GDP include all of the following EXCEPT A. net exports. B. government purchases of goods and services. C. expenditures for business investments. D. the implicit payments for unpaid household work.
D. the implicit payments for unpaid household work.
The market system's answer to the fundamental question "What will be produced?" is essentially: A. "Goods and services that are profitable." B. "Low cost goods and services." C. "Goods and service that can be produced using large amounts of capital." D. "Goods and services that possess lasting value."
A. "Goods and services that are profitable."
The market system's answer to the fundamental question "Who will get the goods and services?" is essentially: A. "Those willing and able to pay for them." B. "Those who physically produced them." C. "Those who most need them." D. "Those who get utility from them."
A. "Those willing and able to pay for them."
Refer to the above data. The national income is: A. $265. B. $223. C. $208. D. $346.
A. $265.
Which of the following institutional structures is most likely to promote growth? A. A well-enforced system of patents and copyrights. B. A tightly regulated market system. C. A system of tariffs and other trade barriers to protect domestic companies. D. All of these.
A. A well-enforced system of patents and copyrights.
Which of the following is a final good or service? A. a haircut B. fertilizer purchased by a farm supplier C. diesel fuel bought for a delivery truck D. Chevrolet windows purchased by a General Motors assembly plant.
A. a haircut
A nation's gross domestic product (GDP): A. can be found by summing C + Ig + G + Xn. B. is the dollar value of the total output produced by its citizens, regardless of where they are living. C. can be found by summing C + S + G + Xn. D. is always some amount less than its NDP.
A. can be found by summing C + Ig + G + Xn.
The quantity sold in a market will increase if the government: A. decreases a binding price floor in that market B. decreases a binding price ceiling in that market C. increases a tax on the good in that market D. more than one of the above is correct
A. decreases a binding price floor in that market
Compound interest: A. describes how quickly an interest-bearing asset increases in value B. measures the rate of return of a portfolio of stocks and bonds C. measures the after-tax, inflation-adjusted rate of interest D. refers to the multiple rates of interest of various types of bonds in a portfolio
A. describes how quickly an interest-bearing asset increases in value
Economic growth is best defined as an increase in: A. either real GDP or real GDP per capita. B. nominal GDP. C. total consumption expenditures. D. wealth in the economy.
A. either real GDP or real GDP per capita.
A competitive market system: A. encourages growth by allowing producers to make profitable investment decisions based on market signals. B. encourages growth by ensuring that everyone in society will receive a decent standard of living. C. discourages growth because firms busy competing have no time to innovate or invest. D. discourages growth unless government protects domestic firms from foreign competition.
A. encourages growth by allowing producers to make profitable investment decisions based on market signals.