Suppose that business firms spend 500 million on new capital ...

[tiffannnnyyyyyy]

Suppose that business firms spend 500 million on new capital equipment this year. Of this 500 million, 300 million was spent on domestically produced capital and 200 million was spent on foreign-produced capital.
 
  All else equal, these transactions contribute ________ to GDP. A) 0
  B) 200 million
  C) 300 million
  D) 500 million
  E) 800 million

Question 2

When law-makers impose ceilings on the amount of annual interest charged by lenders, their actions have the effect of
 
  A) excluding certain borrowers from the legally regulated credit market.
  B) expanding retail sales.
  C) increasing the number of loans made.
  D) lowering interest rates for most borrowers.
  E) redistributing income from creditors to debtors.

[1_Step_At_ATime]

Answer to Question 1

C

Answer to Question 2

A