Choose the best statement
A) GDP equals aggregate expenditure and equals aggregate income.
B) An increase in government purchases increases aggregate expenditure but does not change GDP.
C) An increase in compensation of employees increases aggregate income but does not change GDP.
D) GDP always equals aggregate expenditure and sometimes equals aggregate income.
A
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Subtracting borrowed reserves from the monetary base obtains
A) reserves. B) high-powered money. C) the nonborrowed monetary base. D) the borrowed monetary base.
What do we mean when we state that a particular principal-agent payment scheme is inefficient?
A) The principal and agent could find another agreement that would increase the sum of the owner's revenue and the worker's payment. B) The agreement involves the highest level of effort for the worker. C) The agreement leads to the lowest level of revenue for the owner. D) The sum of the income taxes paid by the owner and the worker is too high.