The term underground economy refers to
a. the coal-mining industry
b. all ore mining
c. the subway system
d. purely illegal activity
e. market activity not reported to the government
E
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How does a country maintain a fixed exchange rate?
A) By intervening in the foreign exchange markets and buying or selling currency as needed to achieve the desired exchange rate. B) By forbidding foreign exchange markets to trade currency at anything other than the official exchange rate. C) By setting domestic interest rates to achieve purchasing power parity as the desired exchange rate. D) By intervening in import and export markets to achieve the desired current account and exchange rate.
Why will there be less crowding out of private spending by government spending the less sensitive consumption, investment, and net exports are to changes in interest rates?
What will be an ideal response?
Refer to Table 5.4. If outcomes 1 and 2 are equally likely at Job A, then in absolute value
A) W = X = $10. B) W = X = $20. C) W = Y = $100. D) W = Y = $200. E) W = Y = $300.
Answer the following statement(s) true (T) or false (F)
1. The price elasticity of supply measures the relative change in the quantity consumers demand that results from a change in price. 2. The price elasticity of supply is defined as the percentage change in the quantity supplied multiplied by the percentage change in price. 3. In a condition of perfectly inelastic supply, an increase in price will not change the quantity supplied. 4. In a condition of perfectly elastic supply, the elasticity of supply is 100. 5. Supply is usually more elastic in the short run than in the long run.