The value of intermediate goods is excluded from the measurement of GDP in order to:
A. adjust for inflation.
B. index economic activity.
C. avoid double counting.
D. measure GDP in constant prices.
Answer: C
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A debtor's quantity of credit demanded and the rate of interest are likely to be:
A) positively correlated. B) unrelated. C) negatively correlated. D) positively related if the rate of interest is below 10% and negatively related if it is above 10%.
The price a borrower must pay for the use of other people's money is called
A) a dividend. B) financial capital. C) liquidity. D) interest.
What sort of productivity shocks would cause lower real wage growth and result in lower growth in labor productivity?
A) productivity shocks which decrease supply of labor given the demand for labor B) productivity shocks which increase supply of labor given the demand for labor C) productivity shocks which increase demand for labor given the supply of labor D) productivity shocks which decrease demand for labor given the supply of labor
Which of the following is an example of a positive economic statement?
A) The U.S. public should devote more resources to education. B) The poor should pay lower taxes and the rich should pay higher taxes. C) Soap operas should be taken off television. D) If you drop a ball from the top of a building, it will fall to the ground.