GDP excludes most nonmarket transactions. Therefore, GDP tends to:
A. Underestimate the rate of inflation in the economy
B. Overestimate the rate of inflation in the economy
C. Overestimate the amount of production of the economy
D. Underestimate the amount of production in the economy
D. Underestimate the amount of production in the economy
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Amanda inherited the only local cable TV/Internet company in town after her father passed away. The company has a local monopoly on the delivery of high-speed Internet service. The company is completely unregulated by the government and is therefore free to operate as it wishes. Assume that Amanda understands the true power of her new monopoly. Which of the following statements is (are) correct?
(i) She will be able to set the price of high-speed Internet service at whatever level she wishes. (ii) The customers will be forced to purchase high-speed Internet service at whatever price she wants to set. (iii) She will be able to achieve any profit level that she desires. a. (i) only b. (ii) only c. (i) and (iii) only d. (i), (ii), and (iii)
If demand for a good decreases and supply remains constant equilibrium price:
a. Will increase, and equilibrium quantity will decrease b. And quantity will both increase c. And quantity will both decrease d. Will decrease, and equilibrium quantity will increase
Which of the following has occurred when government directives do not produce better economic outcomes?
A. Government failure. B. Macroeconomic failure. C. Market failure. D. Scarcity.
At ________ levels of output, the economy can expand with little or no increase in the overall price level because firms likely hold excess labor and capital, and production can be increased without causing input prices to increase.
A. full capacity B. high C. full employment D. low