The investment component of GDP measures spending on
a. financial assets such as stocks and bonds. During recessions it declines by a relatively large amount.
b. residential construction, business equipment, business structures, and changes in inventory. During recessions it declines by a relatively large amount.
c. financial assets such as stocks and bonds. During recessions it declines by a relatively small amount.
d. residential construction, business equipment, business structures, and changes in inventory. During recessions it declines by a relatively small amount.
b
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The income-expenditure model of real GDP determination is due to the work of
A) Adam Smith. B) J. B. Say. C) John Maynard Keynes. D) Roger Miller.
Jim has estimated elasticity of demand for gasoline to be -0.7 in the short-run and -1.8 in the long run. A decrease in taxes on gasoline would: a. lower tax revenue in both the short and long run. b. raise tax revenue in both the short and long run
c. raise tax revenue in the short run but lower tax revenue in the long run. d. lower tax revenue in the short run but raise tax revenue in the long run.