How does chain weighting lead to a different measurement of real GDP than the methods used by the BEA prior to 1996? What are the advantages of chain weighting? What are the disadvantages?
What will be an ideal response?
Prior to 1996, the growth rate of real GDP depended on which year was chosen as the base year. Now, however, the current year and preceding year are used as base years, averaging results using each as base year. The advantages of this method are that there is no longer a need to recompute historical data or to change base years. However, a disadvantage is that real GDP is no longer the sum of its components.
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Tax reduction and simplification should ________ long-run aggregate supply and ________ aggregate demand
A) decrease; increase B) increase; decrease C) decrease; decrease D) increase; increase
If Gloria is woman in a developing country, then it is likely that
a. she is less educated than most men in her country b. her brother has dropped out of high school, but not she has graduated c. she has more employment opportunities and earns higher wages than her male classmates d. she and other women will not have to work long hours in agriculture e. she has special access to resources such as land, capital, and technology
The marginal revenue product of a resource:
a. is defined as the marginal product of the resource multiplied by the resource price. b. simply means that a firm should add to its capital stock as long as competition requires it. c. equals the extra output produced by an additional unit of the resource multiplied by the price of that output. d. equals the average product of the resource multiplied by the cost of hiring an additional (marginal) unit of the resource.
Which of the following is an example of a produced factor of production?
a. corn that is harvested from a field in Iowa b. workers who are hired at a coal mine in West Virginia c. skills that teachers in Texas acquire through continuing-education classes d. All of the above are correct.