To Get a Complete Measure of the Total Spending on U.S.-Produced

question 104

Multiple Choice

To get a complete measure of the total spending on U.S.-produced final goods and services, one must adjust aggregate demand by

• A)adding imports and subtracting exports.
• B)adding imports that are purchased by U.S.consumers.
• C)adding exports and subtracting imports.
• D)subtracting exports sold to foreigners.

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Definitions:

Inferior Good

An inferior good is a type of product that sees an increase in demand as consumers’ income decreases, contrary to what is observed with normal goods.

Complement

A good or service that, when used together with another, enhances mutual use and utility, often impacting demand in correlated ways.

Public Service Announcements

Messages broadcasted to inform or educate the public on issues of public interest without commercial intention.

Mandatory Health Warnings

Compulsory advisories placed on products, such as cigarettes, to inform consumers of health risks.