In the calculation of GDP, what is double counting? How can double counting be avoided when calculating an economy's GDP?
The problem of double counting occurs when the price of both final and intermediate goods is included while calculating the GDP of an economy. This occurs because most goods produced are manufactured in stages by many different companies.
The problem of double counting can be avoided by clearly distinguishing intermediate goods from final goods. Intermediate goods and services are used as components to produce final goods and services, while final goods and services can be used directly by consumers. An economy's GDP is calculated by capturing the value of final products.
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The efficient quantity of a public good is provided when the economy's
A) total benefit from the good equals its total cost. B) total benefit from the good is less than its total cost. C) marginal social benefit from the good equals its marginal social cost. D) marginal social benefit from the good is greater than its marginal social cost.
When the expenditure schedule is too high, the result is a(n)
a. unemployment surplus. b. inflationary gap. c. recessionary gap. d. budgetary gap.