Marianne and Laura are both homemakers with children. When Laura starts to work as an unpaid volunteer at a hospital, she hires Marianne to care for her young child. In this context, the gross domestic product (GDP) will _____
a. increase
b. decrease
c. remain unaffected
d. increase if Marianne cares for the child better than Laura
e. increase if Laura treats patients with more sincerity than the other volunteers
a
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
Managers' pursuit of which of the following objectives would NOT lead to a principal-agent problem in a corporation?
A) The corporation's growth B) Increased market share for the corporation C) The maximum possible profit for the corporation D) A great "golden parachute" or retirement package E) Increased current salary and fringe benefits
Refer to the above figure. How do you describe what is happening as the economy moves from point C to point B?
A) Previously unemployed resources are now being devoted to the production of wool. B) Previously unemployed resources are now being devoted to the production of bread. C) The economy has increased its wool production by 30 bales at an opportunity cost of 250 loaves of bread. D) The economy has acquired new resources for making bread.
About how much of the tax is paid by consumers in the form of higher prices?
A. $1.00
B. $1.35
C. $1.65
D. $2.00