Prices are used in national income accounting for all of the following reasons except to
A. Compare the value of output of one period with that of another.
B. Add the values of output from different sectors of the economy.
C. Provide an index to measure unemployment.
D. Provide an index to measure the rate of inflation.
Answer: C
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A country that has an absolute advantage in producing all goods will ________
A) have a comparative advantage in some goods but not all B) produce all goods at lowest opportunity cost C) have a comparative advantage in all goods D) not gain from specialization and trade
The present value of a future sum of money is the amount that, if invested today, will grow
A) as large as that future sum, given the interest rate. B) at a constant rate forever. C) as large as that future sum, less taxes payable. D) as large as that future sum, if the interest rate is zero.
If a forecast made using all available information is NOT perfectly accurate, then it is
A) still a rational expectation. B) not a rational expectation. C) an adaptive expectation. D) a second-best expectation.
Markets can efficiently handle irreversible decisions without involvement of government
a. True b. False Indicate whether the statement is true or false