Interest paid by businesses is
A. included in both GDP and national income.
B. not counted in GDP because it is not assumed to flow from the production of goods and services.
C. counted in national income, but not in GDP.
D. not counted in GDP but is counted in GNP because it is paid by U.S. businesses.
Answer: A
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Assume that the United States uses 20 worker-hours to produce 1 computer and 5 worker-hours to produce 1 unit of food; assume also that Japan uses 10 worker-hours to produce 1 computer and 30 worker-hours to produce 1 unit of food. Which of the following statements is true?
a. Japan has the comparative advantage in food production. b. The United States has the comparative advantage in food production. c. The United States has the absolute advantage in food production. d. The United States has a lower opportunity cost for making computers. e. Japan has a lower opportunity cost for making food.
A perfectly competitive market is in equilibrium and 100,000 units are being produced. If three firms take over this market and a Cournot oligopoly is formed, what is the new total equilibrium quantity produced?
A) 75,000 B) 133,333 C) 82,500 D) 100,500