As presented in the textbook, gross domestic product is the sum of annual
A) business profits (both incorporated and unincorporated) plus all tax receipts of federal, state, and local governments.
B) consumption, saving, and investment.
C) expenditures for new final goods by consumers, investors, government.
D) total sales of all business firms.
E) wages and salaries paid or received.
C
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Some economists argue that the federal government should normally run a deficit at potential GDP, with the borrowed funds applied to
A) health care costs. B) social security benefits. C) investment goods. D) consumption goods.
Pencils sell for 10 cents and pens sell for 50 cents. Suppose Jack, whose preferences satisfy all of the basic assumptions, buys 5 pens and one pencil each semester. With this consumption bundle, his MRS of pencils for pens is 3
Which of the following is true? A) Jack could increase his utility by buying more pens and fewer pencils. B) Jack could increase his utility by buying more pencils and fewer pens. C) Jack could increase his utility by buying more pencils and more pens. D) Jack could increase his utility by buying fewer pencils and fewer pens. E) Jack is at a corner solution and is maximizing his utility.