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Theequilibriumquantitydecreasesbuttheequilibriumpricei

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Unformatted text preview: rexpendituresare$3,500billion, governmentpurchasesare$900billion,andgrossprivatedomesticinvestmentis$400 billion.Netexportsare$200billion.(False,itshouldbe ­$200billion)  29. WhentheU.S.CorporationpurchasedearthmovingequipmentfromChina,U.S.investment  increased,Chinesenetexportsincreased,andbothU.S.GDPandChineseGDPincreased.False The purchase of foreign equipment is counted as investment, but GDP measures only the value of production within the geographic borders of the United States. In order to avoid including the value of the imported equipment, imports are subtracted from GDP. Hence, the value of the equipment in investment is canceled by subtracting its value as an import.  30. Suppose the price index was 100 in 2004, 115 in 2005, and the inflation rate was lower between 2005 and 2006 than it was between 2004 and 2005. This means that the price index in 2006 could be greater than 115, but lower than 130. (True)...
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  • Spring '14
  • Inflation, Tasty Cereal Company, of0200attending0200college 0200 exceeds0200the0200marginal0200benefit, indeterminate 0200 and0200depends0200on0200the0200magnitudes0200of0200these0200demand0200, 0200normative0200statement 0200

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