The GDP figures fail to count labor services and other household production. Once this omission is taken into account
What will be an ideal response?
the income differences between the high and low income countries are still huge
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If the average cost curve for an individual firm is decreasing when it intersects the market demand curve, why is a natural monopoly likely to develop in this market? Explain
What will be an ideal response?
A parent company rewarding managers on profit centers can simply
a. Subtract division costs from the division revenue and reward the manager on the difference b. Add the division costs to the division revenue and reward the manager on the sum c. Reward the manager on the revenue of the division d. Reward the manager on the costs of the division
Foreign repercussions of changes in domestic spending may cause:
a. the GDP gap to be larger than the recessionary gap. b. the equilibrium income to increase by an amount equal to the change in net exports. c. the actual spending multiplier to be larger than the reciprocal of the marginal propensity to save plus the marginal propensity to import. d. equilibrium income to rise by a smaller amount than evidenced by the multiplier effect of autonomous spending increase. e. the real GDP to be larger than potential GDP.
Graphically, a kinked demand curve is
a. more elastic to the right of the kink than to the left b. more inelastic to the right of the kink than to the left c. more inelastic to the left of the kink than to the right d. present when there is a monopoly e. bowed-in or bowed-out, depending on the kink