Which of the following activities is not counted in our calculations of GDP?
a. the purchase of a hammer for household repairs
b. the labor services of a volunteer group building a home for a poor widow
c. the purchase of new, domestically-produced tires for your old foreign car
d. a haircut received and paid for at a beauty salon
B
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Answer the following questions true (T) or false (F)
1. An expansionary monetary policy by the Federal Open Market Committee would cause interest rates to decline and the exchange rate to depreciate, ceteris paribus. 2. Comparative advantage is a monetary concept and is affected by changes in exchange rates or inflation. 3. The mercantilist philosophy argues that nations can become rich and powerful by exporting more than they import.
An example of a positive externality is
A. Increased factory use of private sector robotics that came from government research. B. Increased business profits at a hardware store that benefited from a tornado. C. Increased health problems from air pollution. D. None of the choices are correct.