The nominal GDP of Year 2 is

Answer the following statements true (T) or false (F)

1. If gross investment is positive, it means that firm (or the economy) is must be expanding. 2. Changes in business inventories are included as part of investment in the national income accounts. 3.In an economy, the value of inventories fell by $50 billion from Year 1 to Year 2. In calculating total investment for Year 2, national income accountants would increase it by $50 billion. 4. If the University of Missouri, a public school, builds a new laboratory, then it will be counted as part of I g in GDP. 5. Government purchases are the largest component of aggregate expenditures in the United States.

The cross-price elasticity of demand between bread and potatoes is estimated to be 0.5. This implies bread and potatoes are:

A. normal goods. B. complements. C. substitutes. D. unrelated.