GDP cannot be used for international comparisons because
A. countries differ in the share of economic activity done in organized markets.
B. countries are similar in the skills of the labor force.
C. countries differ in population statistics.
D. countries differ in political structure.
Answer: A
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Stock prices in Richland declined suddenly after one of the largest banks in Richland faced bankruptcy. If animal spirits play an important role in shaping Richland's economy, which of the following is likely to happen assuming all else equal?
A) Equilibrium unemployment in Richland will fall. B) Equilibrium wage levels in Richland will fall. C) Investment by firms in Richland will increase. D) Richland's consumption expenditure will increase.
How is a politician similar to an entrepreneur?
A) Each advances a project solely in the public interest. B) Each advances a project only if the expected marginal benefits equal the expected marginal costs. C) Each advances a project only if the expected marginal benefits exceed the expected marginal costs. D) Each advances a project only if they impose no negative externalities.
Refer to Figure 13-2. Ceteris paribus, an increase in productivity would be represented by a movement from
A) SRAS1 to SRAS2. B) SRAS2 to SRAS1. C) point A to point B. D) point B to point A.
Price elasticity of demand is defined as
A. slope divided by price. B. percentage change in price divided by percentage change in quantity demanded. C. percentage change in quantity demanded divided by percentage change in price. D. the inverse of the price elasticity of supply.