Why do we not count the value of intermediate goods and services in gross domestic product? Does the value of intermediate goods and services show up in gross domestic product? If so, how?
What will be an ideal response?
We would double count if we counted directly the value of intermediate goods and services, because their value shows up in the value of the final goods and services in which they are a part.
Economics
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In the dynamic aggregate demand and aggregate supply model, what is the result of aggregate demand increasing slower than potential real GDP?
What will be an ideal response?
Economics
If the Federal Reserve wants to increase the availability of money and credit, it can
a. lower the discount rate. b. raise the reserve requirements. c. sell government bonds to the public. d. encourage banks to increase their prime lending rate.
Economics