Economics Flashcards
Transfer pricing
The determination of the amounts at which transactions between affiliated entities will be recorded
What does Gross domestic product (GDP) measure?
The total monetary value of all final goods and services produced within a nation in one year
What countries has the world’s largest exporters of goods and services?
China, Germany, the U.S., and Japan, in that order
What actions will dampen the economy and prevent inflation?
Reduce government spending, increase taxes, reduce money supply and increase interest rates.
How are exchange rates are determined?
Supply and demand in the foreign currency market
When production level will monopolistic competition maximize profits?
When Marginal revenue = Marginal cost.
At that level of production, the revenue from the last unit produced is exactly equal to the cost of producing that unit.
Elasticity of demand
Percentage change in quantity demanded/
Percentage change in price
At the economy’s peak business cycle, what effective way will dampen the economy and prevent inflation
Reduce govt spending, increase taxes, reduce money supply, and increase interest rates
