Assume that the size of the underground economy increases both absolutely and relatively over time. As a result:
a) real GDP will rise more rapidly than nominal GDP.
b) GDP will tend to increasingly understate the level of output through time.
c) GDP will tend to increasingly overstate the level of output through time.
d) the accuracy of GDP will be unaffected through time.
b) GDP will tend to increasingly understate the level of output through time.
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In reference to determining the optimal amount of advertising, managers of trade associations face each of following additional challenges except which one?
A) the challenge of a constant marginal benefit of advertising across firms B) the free rider problem C) difficulty in prescribing a fair and practical way to share the cost of advertising across firms D) difference in the marginal benefits of advertising across firms
Maximizing the benefits of a transaction made under a contract often requires specific investments that lose value if the parties fail to fulfill their commitments
Indicate whether the statement is true or false
Fixed exchange rates require governments to have
a. control over the cuntry's exports b. anti-arbitrage investigators c. large quantities of gold d. trade surpluses e. foreign exchange reserves
Technological change that affects the marginal products of high-skilled and low-skilled workers differently is called ________ technological change.
A. high-low B. capital-labor C. skill-biased D. marginal-productivity