While Firms Buy Many of Their Inputs Through the Open

question 29

Multiple Choice

While firms buy many of their inputs through the open market,there is often a desire to produce critical inputs.A common concern in producing an input internally is that:

• A)the firm will find it too easy to manage quality.
• B)the firm will not be able to minimize costs over the long run.
• C)outside competitors will learn about the quality of inputs.
• D)the firm will get prompt supply of the input.

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Definitions:

Net Exports

The net amount obtained when a nation's overall imports are subtracted from its overall exports.

GDP Deflator

A measure of the level of prices of all new, domestically produced, final goods and services in an economy, used to adjust nominal GDP to calculate real GDP.

Inflation

The acceleration in the general cost levels of goods and services, causing a decline in the ability to acquire.

Real GDP

Real Gross Domestic Product (GDP) measures the value of all final goods and services produced within a country in a given period, adjusted for inflation.