In the permanent-income hypothesis incorporating rational expectations, the actual cyclical pattern of consumption in the United States is too ________ to justify the assumption that a current change in income ________
A) smooth, is a poor guide to future income changes
B) volatile, is a poor guide to future income changes
C) smooth, leads to a gradual change in permanent income
D) volatile, leads to a gradual change in permanent income
B
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Marginal physical product is measured in terms of
a. added units of labor b. added units of output c. total output divided by total labor d. total value of output e. added dollars to the firm
Tradeable effluent markets
a. exist only in the United States b. are being used only for point to point trades c. are in use in the United States, Canada, and Australia d. have resulted in consistently high rates of trading activity
Which of the following is a significant weakness of GDP as a measure of the nation's economic performance?
A. GDP excludes the secondhand good market because it is impossible to obtain an estimate of the amount sold. B. GDP excludes the value of the buying and selling of securities. C. GDP excludes nonmarket production, such as black market activities. D. GDP considers product and factor markets but not services.
A member in a cartel can earn more profits by
A) charging a slightly lower price and raising production. B) producing less than the agreed rate. C) selling less than the agreed amount. D) none of the above.