Rhonda sells a house she has owned for 15 years and starts living in a rented apartment. To make it more marketable, she buys carpeting that she has professionally installed and buys wallpaper that her daughter hangs. Which items would be included in this year's gross domestic product (GDP)?
a. The sale price of the house
b. The cost of transporting all her furnitures to the new apartment
c. The opportunity cost of Rhonda's daughter's time
d. The opportunity cost of Rhonda's time
e. The purchase price for carpet and wallpaper, and the installation fee for the carpet
e
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What is the distinction between a movement along the consumption function and a shift of the consumption function?
a. A movement along the consumption function is caused by a change in income and a shift of the consumption function is caused by a nonincome determinant. b. A movement along the consumption function is caused by a change in interest rates and a shift of the consumption function is caused by an income determinant. c. A movement along the consumption function is caused by a change in net wealth and a shift of the consumption function is caused by an income determinant. d. There is not distinction between the two, they are the same movement.
In the macroeconomy, demand-side shifts change:
A. only the price level in the long run, while output eventually returns to its long-run potential level. B. only the output level in the long run, while prices eventually return to their long-run potential levels. C. aggregate demand only, which eventually shifts back in the long run. D. aggregate demand only, which is why the price level remains unaffected in the long run.