GDP is not a perfect measure of social welfare and the society's economic well-being because
A. it does not say anything about the distribution of income.
B. it does not include all economic activities in the economy.
C. GDP accounting rules do not adjust for production that causes negative externalities.
D. all of the above.
Answer: D
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________ account for the largest portion of all firms; ________ account for most of the total revenue received by businesses
A) Proprietorships; partnerships B) Proprietorships; corporations C) Partnerships; corporations D) Corporations; proprietorships
In a free-market economy, the pricing mechanism always operates to
A. produce an equitable distribution of income. B. provide an efficient allocation of resources. C. correct any inequality in distribution of output. D. equate consumers’ desires with ability to pay.
Fill in the blanks. The demand curve for an inferior good is _________ sloping, while the demand curve for a Giffen good is _______ sloping.
a. downward; downward. b. downward; upward. c. upward; downward. d. upward; upward.
The price of a new textbook is $120 in one year and is $150 two years later, while the price of a used copy of the text increased from $40 to $60. The relative price of a new textbook
A. decreased from 3 to 2.5. B. increased from 3 to 4.5. C. decreased from 0.8 to 0.67. D. remained constant.