Which of the following might result in an underestimation of GDP?
a. Significant underground activity such as trade in illegal drugs
b. Sales of used cars
c. Many intermediate goods
d. Imported goods
e. Exported goods
A
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Which of the following describes a situation in which demand must be inelastic?
a. The price of pens rises by 10 cents, and quantity of pens demanded falls by 50. b. The price of pens rises by 10 cents, and total revenue rises. c. A 20 percent increase in the price of pens leads to a 20 percent decrease in the quantity of pens demanded. d. Total revenue does not change when the price of pens rises. e. Total revenue decreases when the price of pens rises.
Suppose it takes Paul 3 hours to bake a cake and 2 hours to mow the lawn, and suppose it takes Tom 2 hours to bake a cake and 1 hour to mow the lawn. Which of the following statements is correct?
A. Paul has the comparative advantage in mowing the lawn. B. Paul has the absolute advantage in mowing the lawn. C. Paul has the comparative advantage in baking cakes. D. Paul has the absolute advantage in baking cakes.
If an individual consumes more of Good X when his/her income doubles, we can infer that
A. Good X is an inferior good. B. the demand for Good X is perfectly inelastic. C. the individual is highly sensitive to changes in the price of Good X. D. Good X is a normal good.
The introduction of the practice of securitization allowed:
A. the government to promote a sense of security in the banking industry. B. borrowers to feel better about taking out subprime loans. C. banks to more safely leverage their investments. D. banks to more safely assume subprime mortgage loans.