This year a firm produces $100 million worth of cars this year and sells $102 million worth of cars. Which of the following is true?
A) GDP for this year will increase by $100 million.
B) GDP for this year will increase by $102 million.
C) Inventory investment will increase by $2 million.
D) GDP for this year will increase by $202 million.
E) The premise of the question is wrong because it is impossible for a firm to sell more than it produces in a given time period.
A
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The voting members of the Federal Open Market Committee are
A) all of the members of the Board of Governors and five of the presidents of the 12 Federal Reserve banks. B) only the members of the Board of Governors. C) the presidents of the 12 Federal Reserve banks and three members of the Board of Governors. D) all of the members of the Board of Governors and all of the presidents of the 12 Federal Reserve banks.
Yi and Avik are both economists. Yi thinks that taxing consumption, rather than income, would result in higher household saving because income that is saved would not be taxed. Avik does not think that household saving would respond much to a change in the tax laws. In this example, Yi and Avik
a. hold different normative views about the tax system. b. disagree about the validity of a positive theory. c. have a fundamental misunderstanding of the tax system. d. More than one of the above is correct.