The Bigdrill company drills for oil, which it sells for $200 million to the Bigoil company to be made into gas. The Bigoil company's gas is sold for a total of $600 million
What is the total contribution to the country's GDP from companies Bigdrill and Bigoil? A) $200 million
B) $400 million
C) $600 million
D) $800 million
C
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Suppose an economy's exchange rate system is the gold standard and vast tracks of gold are discovered, as is what happened in the United States in 1849. If the economy is at full employment, what should this discovery do?
A) It should lower the money supply and cause deflation. B) It should raise the money supply and cause inflation. C) It should raise the money supply and cause disinflation. D) It should raise the money supply but have no impact on the price level. E) it should not change the money supply.
Which of the following is an example of a negative externality?
A. Government funding of public education. B. An increase in government bureaucracy and red tape. C. An increase in the incidence of cancer due to pollution. D. A factory introduces a production process that reduces pollution.