The best measure of a country's living standard is______
a. real gdp per capita
b. average annual investments
c. CPI-based inflation rates
d. the minimum wage
Ans: a. real gdp per capita
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In 2007, European Union (EU) negotiators have offered to cut tariffs for Latin American bananas to avoid "banana wars". What are the effects of a cut in tariffs?
A) The quantity of bananas imported into the EU will increase. B) The price of bananas for consumers will increase. C) The quantity of bananas produced in the EU (such as in France and Spain) will increase. D) Europe will start to export bananas.
Suppose the production possibilities for two countries, producing either food or clothing, are shown in the above figure. The U.S. has a comparative advantage in producing
A) food. B) clothing. C) food and clothing. D) neither good.
What would the interest rate need to be in order to earn $100 on an investment of $1,000 over two years? Assume interest compounds annually.
What will be an ideal response?
An efficient solution to a pricing problem
A. makes both buyers and sellers better off than any other possible solution. B. may not be the socially “fair” solution. C. occurs when producers’ total cost of production equals consumers’ total utility from the output produced. D. maximizes the output of the good being priced.