Question

Free trade leads to an overall improvement in the standard of living in a country because everything is produced at the lowest possible cost.

True

False

A horizontal aggregate supply curve indicates that equilibrium real GDP is determined by aggregate supply.

True

False

Bill Gates’ recent purchase of a new Rolls-Royce automobile produced in Great Britain will:

increase the net export component of U.S. gross domestic product.

have no effect on either country’s GDP.

decrease Great Britain’s GDP.

increase the gross domestic product of the United States.

have to be subtracted from the U.S. GDP.

Goods are scarce when:

their price is too high.

their prices are controlled.

people want less of something as compared to what is available.

their price is too low.

the amount people want is more than the amount available at a zero price.

Answer 1

1) :- true that free trade lead to overall improvement in the standard of living in country because everything is produced at low possible cost

• free trade enable country to export and import raw materials or other need good and service from other countries where it is available a low cost with any restriction or heavy custom or penalty.

People free export and import good and service at lowest possible price.

• true a horizontal aggregate supply curve indicate that equilibrium real GDP is determined by aggregate supply

• the aggregate supply curve show that total quantities of output real GDP firm produce and sell at each level price.

• horizontal axis show real GDP , at that GDP adjusted for inflation.

3) :-e is right option that have to subtracted from US GDP

• BECAUSE when export increase bring money in country increase GDP.

•but when import increase it decrease own country money and it lead to decrease in GDP too

4) :- good are scared when the amount people want is more than the amount available at a zero price.

• because scared good are those good that has more quantity demand than quantity supply at price of $0