GDP tends to overstate economic well-being because it takes into account:
A. Improvements in product quality over time
B. Expenditures undertaken to correct pollution
C. Illegal activities of individuals and businesses
D. Nonmarket activities, such as the productive work of homemakers
B. Expenditures undertaken to correct pollution
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The Coase theorem says that which of the following is necessary to lead to an efficient use of resources?
A) presence of transaction costs B) existence of property rights C) government intervention D) All of the above answers are correct.
The multiplier effect suggests that:
A. a tax cut will increase GDP by more than the amount of the initial tax cut. B. a ripple effect occurs from one person's initial spending. C. government spending $1 will create more than a $1 increase in GDP. D. All of these are true.
When a pharmaceutical company advertises that its allergy medication is clinically proven to alleviate hay fever symptoms, the pharmaceutical company is engaging in
A) informational advertising. B) trademark protection. C) persuasive advertising. D) direct marketing.
________ is an example of tangible capital.
A. A pet store's unsold, unopened bags of dog food B. An idea for a new business C. Knowledge of how to operate a forklift D. The goodwill a firm has established through charitable giving