Suppose You Have Data on Durable Goods,nondurable Goods,fixed Investment,government Purchases,exports,and

question 106

Multiple Choice

Suppose you have data on durable goods,nondurable goods,fixed investment,government purchases,exports,and imports.Can you compute GDP?

• A) No,since data on services and profits are missing.
• B) No,since data on inventory investment and profits are missing.
• C) No,since data on inventory investment and services are missing.
• D) No,since data on services and dividends are missing.
• E) Yes,all of the necessary components of GDP are given.

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Definitions:

Long Run

A time period in economic analysis during which all factors of production and costs can be variable, allowing for full adjustment to changes in market conditions.

Variable Costs

Costs that vary directly with the level of production or output, such as materials and labor.

Fixed Costs

Costs that do not change with the level of output or sales, such as rent or salaries.

Profit-Maximizing

The operational method a firm adopts to calculate the pricing and output that bring in the highest profit.