GDP can be computed as the sum of
A) all sales that have taken place in an economy over a period of time.
B) the total expenditures of consumers and business over a period of time.
C) the total expenditures of consumption, investment, and government expenditure on goods and services over a period of time.
D) the total expenditures of consumption, investment, government expenditure on goods and services, and net exports over a period of time.
Question 2
Suppose a bond promises to pay its holder 100 a year forever. The interest rate on the bond rises from 4 percent to 5 percent. The price of the bond
A) falls from 2,500 to 2,000.
B) does not change because it is not affected by the interest rate.
C) falls from 25,000 to 20,000.
D) rises from 2,000 to 2,500.
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