GDP does not include which of the following activities?
A. Businesses installing anti-pollution equipment
B. Households spending to enhance security of their neighborhoods
C. Couples remodeling their own homes
D. Families eating out in restaurants
C. Couples remodeling their own homes
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If a rent ceiling is set below the equilibrium price, thus creating a ________, housing may be allocated by increasing search activity or creating a ________
A) shortage; black market B) shortage; free market C) surplus; black market D) surplus; open market E) surplus; free market
If the value of bank's loans declines, what is the corresponding reduction in a liability entry that the bank makes?
A) Deposits are reduced by the amount of the decline in the value of the loan. B) Borrowings are reduced by the amount of the decline in the value of the loan. C) Net worth is reduced by the amount of the decline in the value of the loan. D) Cash items in the process of collection are reduced by the amount of the decline in the value of the loan.
Ethics play a key role in income redistribution.
A. True B. False C. Uncertain
If at optimum output of 1,000 units, the firm is incurring average variable cost per unit of $3, average fixed cost per unit of $1.50, and selling its output at $7 per unit, total profit is
a. $7,000. b. $2,500. c. $1,500. d. $250.