Real GDP does not show the state of economic welfare in a country in part because GDP omits
I. household production.
II. leisure time available.
III. the quality of the environment.
A) I only
B) I and III
C) II and III
D) I, II and III
D
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If the deficit is 0.08 times GDP, the existing debt—GDP ratio is 0.8, and the growth rate of nominal GDP is 0.05, then the change in the debt—GDP ratio is
A) +0.08 B) +0.04. C) 0. D) -0.08.
The product supplied by a monopoly firm has
a. a few substitutes. b. no close substitutes. c. a large number of substitutes. d. two or three close substitutes.
The money aggregate M1 includes each of the following, except:
A. demand deposits at commercial banks. B. currency in the hands of the public. C. currency in the vaults of commercial banks. D. travelers checks that have been issued.
Marginal revenue equals marginal cost at an output of 10 units. At this output, marginal revenue equals $25, average variable cost equals $30, and average total cost equals $40. In the short run, a profit-maximizing firm will earn a profit of
A. -$150. B. -$100. C. $0. D. $150.