One reason the total sum of the income categories does not equal GDP is that
A) taxes are generally larger than subsidies and the depreciation of capital is negligible.
B) GDP values goods and services at retail prices and the income approach values them at wholesale cost.
C) people do not spend all their income, so the value of consumption expenditure is less than the value of wages.
D) GDP does not include depreciation, which is part of the income categories.
E) GDP values goods and services at market prices and the income approach values them at factor cost.
E
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As capital deepening occurs, there will be increased real wages and economic growth
Indicate whether the statement is true or false
If President Obama agrees with his economic advisers who advocate cutting the rate of unemployment to 3 percent and the rate of inflation to 2 percent, you know he
a. believes the Phillips curve represents his only options b. believes in the rational expectations theory c. is a Keynesian d. is a neo-Keynesian e. believes the Laffer curve has validity
An increase in demand shifts the demand curve to the left
a. True b. False Indicate whether the statement is true or false
Refer to the above figure. Demand is
A. perfectly elastic. B. unitary elastic. C. perfectly inelastic. D. undetermined without more information.