Answer the following statements true (T) or false (F)
1. Do-it-yourself activities of people are a big part of the "underground economy".
2. When businesses have to install anti-pollution equipment to clean up their wastes, they are
adding to GDP.
3. GDP tends to understate economic welfare because it does not take into account increases in
leisure.
4. All activities included in GDP serve to enrich society.
5. Most activities in the so-called underground economy are illegal activities involving drugs or
gambling, for example.
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. FALSE
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Which of the following are predicted by the classical growth theory?
i. Population growth will end economic growth. ii. Real GDP per person will return to subsistence level. iii. Technology drives persistent economic growth. A) i only B) ii only C) i, ii and iii D) i and iii E) i and ii
If bananas were used as money, which of the following functions of money would be the hardest for bananas to satisfy?
A) unit of account B) store of value C) divisibility D) medium of exchange
________ means the supply curve has shifted to the right, while ________ refers to a movement along a given supply curve in response to an increase in price
A) An increase in supply; a decrease in supply B) A decrease in supply; an increase in supply C) An increase in supply; an increase in quantity supplied D) A decrease in supply; a decrease in quantity supplied
The current account balance equals
A) net exports + net transfers + net interest. B) net exports + net transfers. C) net exports - net transfers + net interest. D) net exports - net transfers - net interest. E) net exports + net transfers - net interest.