The growth of GDP may understate changes in the economy's economic well-being over time if the:
A. distribution of income becomes increasingly unequal.
B. quality of products and services improves.
C. environment deteriorates because of pollution.
D. amount of leisure decreases.
B. quality of products and services improves.
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The policy tool of "credit easing" refers to the ________
A) Treasury's issuance of federal debt to finance home buying B) federal government's requirement that the Fed must lend directly to home buyers C) Fed's requirement that the federal government must lend to directly to home buyers D) Fed's purchase of private securities to stimulate banks' lending E) Fed's lowering of the federal funds rate to zero
Compared with the U.S., developing countries
a. face geographic conditions that limit productivity. b. have universal health care that prevent the spread of diseases. c. more political stability. d. higher levels of educational attainment.
If an investment project costing $2,800 was expected to yield $1,000 (to be received at year end) for each of the next three years, a profit-maximizing entrepreneur would
a. definitely undertake the project. b. never undertake the project. c. undertake the project if the interest rate was low enough. d. undertake the project if the interest rate exceeded 12 percent.
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A