The value of goods produced, but unsold, in the current period is:
A. allocated to GDP in future periods when the goods are sold.
B. counted in GDP as inventory investment.
C. counted in GDP as consumption spending.
D. excluded from GDP.
Answer: B
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In the short run, in equilibrium, firms that operate in a monopolistically competitive market face a down sloping demand curve and will charge a price where _____ and ______.
a. quantity produced is maximized; costs are minimized b. sales revenue is maximized; costs are falling c. MR = MC; P > average cost d. average costs are rising; sales are rising
A fundamental reason that governments provide public goods is that
A) those goods are subject to the free-rider problem. B) negative externalities are part of the production process of those goods. C) public goods are merit goods. D) those goods are perfectly divisible.