Sophia just bought shares of IBM stock for $20,000 and paid a $300 commission to her broker. How did this impact GDP?
A) GDP increased by $20,300
B) GDP increased by $300
C) GDP increased by $20,000
D) GDP increased by $19,700
E) it had no impact on GDP
B
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Consider two economies with the same GDP per capita: Barylia and Lithasia. The savings rate in Barylia is 20% while the savings rate in Lithasia is 60%
a. Which of these two countries is likely to accumulate capital faster? b. The government in Barylia decides to provide incentive to its citizens to increase the savings rate further to 80% as a means to improve standards of living. Will the increase in savings and thus investment and output translate into improvements in the standard of living?
The government spending multiplier is likely to be ________ during periods of low output and high unemployment.
A. smaller B. zero C. infinite D. larger