The calculation of real GDP allows us to
A) separate consumption and investment spending.
B) adjust for underground economic activity.
C) adjust for the change in the quality of output over time.
D) compare national output across periods of time.
A
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A unit-elastic demand curve never touches or crosses either of the axes. Why?
What will be an ideal response?
Suppose a tax on sellers has been imposed as shown in the graph. Once the tax is in place, the buyers experience:
A. a decrease in demand.
B. an increase in demand.
C. a decrease in quantity demanded.
D. an increase in quantity demanded.
Which of the following is an example of the monitoring problem?
A. Government fails to stop firms hiring child labor to produce goods. B. The managers of a firm maximize their own salaries to the detriment of maximizing profit for the owner of the firm. C. A firm does not take into account the air pollution caused by a coal factory when pricing its product. D. Two firms collude to set the market price, but the government cannot prove this conclusively.
Who runs the Federal Reserve System? Describe the organizational structure of the Fed.
What will be an ideal response?