How would the value of output produced at an American-owned factory in the United States and a foreign-owned factory in the United States be treated in GDP accounting?
What will be an ideal response?
GDP is a measure of the total market value of all final goods and services produced within the borders of a given country in a given period of time, typically a year. The value of output produced at an American-owned factory in the United States and a foreign-owned factory in the United States would both be treated as part of domestic output in GDP accounting. Thus, GDP represents all domestic production.
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What is the effect of the high (15.3%) U.S. tariff on garments imported from Bangladesh on the Bangladesh economy?
a. It has no effect on the Bangladesh economy, since U.S. consumers ultimately pay the tariff. b. It acts as a hidden tax of $4.61 on Bangladeshi citizens. c. It improves Bangladesh's terms of trade with the United States. d. It has a very small effect on the Bangladeshi economy, since only 10% of its exports to the United States are subject to the tariff.
Sergio's rentals of Blu-ray movies increase by 10 percent when her income increases by 30 percent. Based on this information, we know that for Sergio, Blu-ray movies
A) are complements. B) are substitutes. C) are inferior goods. D) have an inelastic demand. E) are normal goods.