What is a shortcoming of GDP?
GDP excludes nonmarket transactions
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Which of the following activities is excluded from GDP, causing GDP to understate a nation's production?
A. The services of health care workers B. The services of military personnel C. Goods and services produced in the underground economy D. The construction of new buildings
According to the Monetarists, the money supply is a major factor determining
A) aggregate supply. B) aggregate demand. C) velocity. D) real wages.
Suppose there are only two people, Mr. Mullinax and Ms. Fleming, who must split a fixed income of $500. For Mr. Mullinax, the marginal utility of income is MU m = 600 - 2I m , while for Ms. Fleming, marginal utility is MU f = 600 - 3I f , where I m and I f are the amounts of income to Mr. Mullinax and Ms. Fleming, respectively.
(A) What is the optimal distribution of income if the social welfare function is additive? (B) What is the optimal distribution if society values only the utility of Ms. Fleming? What if the reverse is true? Comment on your answer. (C) Finally, comment on how your answers change if the marginal utility of income for both Mr. Mullinax and Ms. Fleming is constant such that Mu m = 250 = MU f . (This one is subtle.) The setup should be I m + I f = 500 and 600 - 3I f = 600 - 2I m
Net public debt is the
A) difference between tax revenues and government expenditures each year. B) sum of accumulated government deficits and surpluses held by individuals and businesses and foreign institutions. C) sum of accumulated government deficits and surpluses held by U.S. government agencies. D) sum of accumulated government deficits and surpluses held by large money center banks.