- Module 10.1: Explain why the three methods of calculating GDP produce the same e...
- Module 10.2: Identify each of the sectors to which firms make sales. What are th...
- Module 10.3: Consider Figure 10.3. Explain why it would be incorrect to calculat...
- Module 10.4: Which of the following is not included in GDP? a. capital goods suc...
- Module 10.5: Which of the following components makes up the largest percentage o...
Solutions for Chapter Module 10: The Circular Flow and Gross Domestic Product
Full solutions for Krugman's Economics for AP® (High School) | 2nd Edition
a market with many buyers and sellers trading identical products so that each buyer and seller is a price taker
balances in bank accounts that depositors can access on demand by writing a check
diminishing marginal product
the property whereby the marginal product of an input declines as the quantity of the input increases
the quantity of output that minimizes average total cost
the quantity supplied and the quantity demanded at the equilibrium price
the uncompensated impact of one person’s actions on the wellbeing of a bystander
the one-for-one adjustment of the nominal interest rate to the inflation rate
a banking system in which banks hold only a fraction of deposits as reserves
a person who receives the benefit of a good but avoids paying for it
the percentage change in the price index from the preceding period
the study of economy-wide phenomena, including inflation, unemployment, and economic growth
median voter theorem
a mathematical result showing that if voters are choosing a point along a line and each voter wants the point closest to his most preferred point, then majority rule will pick the most preferred point of the median voter
the amount of money the banking system generates with each dollar of reserves
net capital outflow
the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners
claims that attempt to prescribe how the world should be
price elasticity of demand
a measure of how much the quantity demanded of a good responds to a change in the price of that good, computed as the percentage change in quantity demanded divided by the percentage change in price
production possibilities frontier
a graph that shows the combinations of output that the economy can possibly produce given the available factors of production and the available production technology
the quantity of goods and services produced from each unit of labor input
unemployment that results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one
two goods for which an increase in the price of one leads to an increase in the demand for the other