A consequence of the CPI bias is that it
A) decreases government outlays.
B) reduces outlet substitution bias.
C) means that it is impossible to measure the inflation rate.
D) increases international trade.
E) distorts private contracts.
E
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Which of the following statements regarding the gross domestic product is true? a. It is useful in comparing the overall performance of different economies at the same time
b. It measures aggregate income in an economy over a period of ten years. c. It measures the value of all goods and services produced in the world during a given period. d. It is a measure of an economy's price level during a particular year. e. It records the cumulative value of all goods and services produced by domestically owned factors of production.
If the ice cream industry is a competitive price-taker market and all ice cream producers are earning zero economic profit, what will be the impact of an increase in the demand for ice cream?
a. Firms will exit the ice cream industry in the long run since they are earning zero economic profit. b. The firms will now be able to earn long-run economic profit assuming that barriers to entry remain low and new firms can enter the market. c. A shortage of ice cream will develop. d. The price of ice cream will rise initially, inducing the existing firms to expand output and new firms to enter the industry.
A monopoly may arise due to:
A. a patent. B. network externalities. C. large economies of scale. D. All of these
The laws of supply and demand force prices to an equilibrium.
Answer the following statement true (T) or false (F)