Refer to the given information. If the members of the underground economy are presently counted as part of the unemployed when in fact they are employed, the official unemployment rate is overstated by about:
A. 0 percentage points.
B. 2 percentage points.
C. 5 percentage points.
D. 6 percentage points.
C. 5 percentage points.
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If the United States has a net export surplus, which of the following must be true?
A) Domestic private saving must be greater than net foreign investment. B) Net foreign investment must be positive as well. C) Domestic public saving must be greater than net foreign investment. D) The balance on the financial account must equal the balance on the current account.
Refer to the above figure. The market equilibrium quantity is Q1. Point Q2 represents the optimal amount of production. This indicates that there is
A) a public good which should be produced. B) regressive taxation of the product. C) a positive externality. D) a negative externality.
A subsidy to buyers has been placed in the market in the graph shown. The result is:
A. a higher quantity bought and sold at a higher price.
B. customers are worse off than before the subsidy.
C. producers are worse off than before the subsidy.
D. None of these is true.
Fractional reserve banking occurs when: a. a bank has reserves that exceed its deposits
b. a bank has reserves that are equal to its deposits. c. a bank has reserves that are less than its deposits. d. some depositors lose their deposits through poor bank management. e. some lenders fail to repay their loans.