When the economy is producing its potential output, an increase in government spending must necessarily reduce some component of private spending. This phenomenon is called

For a firm selling its product in a purely competitive market, the marginal revenue product of labor can be found by:

A. adding marginal product to total product as one more unit of labor is employed. B. adding marginal revenue to total product as one more unit of labor is employed. C. multiplying marginal product by product price. D. dividing marginal product by product price.

The value of intermediate goods is excluded from the measurement of GDP in order to:

A. adjust for inflation. B. index economic activity. C. avoid double counting. D. measure GDP in constant prices.