When the production process extends over more than one year, the value of the final product is:
A. included in GDP for the year in which production began.
B. included in GDP for the year in which production was completed.
C. allocated equally to GDP in each year.
D. allocated to GDP in each year according to the value added in that year.
Answer: D
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If a seller enjoys a producer surplus of $30 when he sells a good for $79, his reservation value for the good is ________
A) $30 B) $49 C) $79 D) $109
Which of the following statements about the effects of an increase in government purchases is most accurate?
a. In the classical model, it will cause complete crowding out. In the short-run macro model, crowding out will be incomplete. b. In the classical model, it will cause incomplete crowding out. In the short-run macro model, crowding out will be complete. c. Crowding out will be complete in both the classical and short-run macro model. d. Crowding out will be incomplete in both the classical and short-run macro model. e. In the classical model, the increase in government spending will lead to a decrease in investment spending and autonomous consumption. In the short-run macro model, it will not.