Government statisticians adjust GDP figures to include estimates of
A. the costs of pollution to society.
B. the underground economy.
C. child-rearing services provided by stay-at-home parents.
D. the value of homemaking (work done within the home).
Answer: B
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A movement along the consumption function shows the change in consumption expenditure as a result of a change in
A) disposable income. B) the interest rate. C) net taxes. D) the price level. E) saving.
The majority of economists favor open capital flows
Indicate whether the statement is true or false
The tax-exempt status of municipal bonds implies that, for private firms
A) the user cost of capital will be higher than otherwise. B) the user cost of capital will be lower than otherwise. C) the marginal product of capital will be lower than otherwise. D) the accelerator will be higher than otherwise.
Concentration of industries can lead to external economies for all of the following reasons EXCEPT
A) concentrated industries will not be competitive. B) concentrated industries will attract a network of input suppliers. C) concentrated industries will attract a deep pool of skilled labor. D) concentrated industries will experience knowledge spillovers.