The difference between Gross National Product and Net National Product is the
a. rate of inflation.
b. statistical discrepancy encountered in calculating GDP.
c. difference between real versus nominal GDP.
d. depreciation of the economy's capital stock.
d
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In the Cobb-Douglas production function Y = AK3/4L1/4,
A) capital is a more expensive input than labor. B) capital is more plentiful than labor. C) diminishing returns to capital are three times greater than are diminishing returns to labor. D) capital has a larger share in national income than does labor.
A consumer equilibrium is depicted using indifference curve analysis as: a. the point where two indifference curves cross
b. the combination of two goods that minimizes total utility for a given level of income. c. the combination of two goods located where the highest attainable indifference curve is just tangent to the budget line. d. any combination of two goods where an indifference curve crosses the budget line.
One of the main advantages of commodity money is:
a. It never loses value because it is valued in terms of fiat money. b. Actually, there are no real advantages of commodity money. c. It is backed 100% by the central bank guarantees. d. It tends to fall in value as inflation rises and to rise as inflation falls. e. It cannot be easily duplicated and therefore manipulated for political advantage.
Which is NOT true about the use of economic models?
A) Economic models are simplified representations of the real world. B) Economists always use experiments in science laboratories to test their theories. C) Economists use what has already happened in the real world to test their theories. D) Economists are employed to explain economic phenomena but are never used to predict what might happen next.