Author Question: In one year, a firm increases its production by 9 million and increases sales by 8 million. All ... (Read 115 times)

nevelica · **on:** Jun 29, 2018

In one year, a firm increases its production by 9 million and increases sales by 8 million. All other things in the economy remaining the same, which of the following is true?

A) GDP increases by 8 million and inventory investment decreases by 1 million.
B) GDP increases by 9 million and inventory investment increases by 1 million.
C) Inventory investment decreases by 1 million.
D) GDP increases by 8 million and investment increases by 1 million.
E) GDP increases by 17 million.

Question 2

Suppose in Italy producers can make 10,000 dresses or 1,000 coats per day, while in Canada producers can make 14,000 similar dresses or 2,000 similar coats per day. Therefore

A) 1 dress costs 7 coats in Italy.
B) 1 dress costs 10 coats in Italy.
C) 1 coat costs 7 dresses in Canada.
D) 1 coat costs 10 dresses in Canada.