Which of the following equations correctly measures GDP in an economy?
A) GDP = C + I + G + X
B) GDP = C + net I + G + NX
C) GDP = C + I + G + NX
D) GDP = C + G + I - taxes
Answer: C
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Suppose a consumer is torn between buying a Chevy Tahoe or a Ford Expedition, each selling for $30,000. He eventually decides on the Tahoe. What's his opportunity cost?
A) $30,000 B) $30,000 plus taxes, tags, insurance, etc. C) The satisfaction he would have experienced owning the Ford Expedition D) The frustration he will face owning the Chevy Tahoe E) B, C, and D above.
By the accelerator hypothesis, if a firm's actual sales jump in one period to a higher maintained level, that firm's net investment
A) also jumps in one period to a higher maintained level. B) gradually drifts upward to a higher maintained level. C) jumps upward and then falls back to zero. D) jumps upward and then falls back part of the way.