Transfer payments are included in which category under the expenditure approach to GDP accounting?
a. consumption
b. government purchases
c. net exports
d. Transfer payments are not directly included in GDP calculations.
d
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Product innovation:
A. is accurately reflected in the basket of goods. B. is not an issue for the CPI since it uses a fixed basket of goods and services. C. doesn't cause the CPI to be overestimated. D. presents a problem for those calculating the CPI because they use a fixed basket of goods.
When a production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis, a rise in labor ________________________, and a rise in capital __________________
A) shifts the production function upward; also shifts the production function upward B) shifts the production function downward; shifts the production function upward C) moves us up along a given production function; shifts the production function upward D) shifts the production function upward; moves us up along a given production function
Which of the following is the best example of a supply-side market failure?
A) No one provides street lights in a town because, once the lights are in operation, people don't have to pay to use them. B) Street performers don't get full payment for the value of their output because people watch and enjoy the shows without paying the artist. C) Government imposes taxes on the production of a socially desirable good. D) A firm keeps its production costs down by dumping its waste in the nearby river, adversely affecting water quality for residents in the area.
Which of the following statements is true?
A. Deflation is an increase in the general level of prices. B. The consumer price index (CPI) measures changes in the average prices of consumer goods and services. C. The real interest rate equals the nominal rate of interest plus the inflation rate. D. Real income is the actual number of dollars received over a period of time.