Net domestic product:
A. is a worse measure of output than gross domestic product because it is distorted by depreciation.
B. increases as depreciation increases.
C. is a better measure of output than gross domestic product because it controls for depreciation.
D. cannot be computed since economists have no measure of depreciation.
Answer: C
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According to Taylor's rule, all of the following variables help explain the behavior of the federal funds rate EXCEPT
A) output gap. B) current inflation. C) inflation gap. D) yield curve.
The hypothesis that people attempt to stabilize their consumption over their entire lifetime is the
A) life cycle hypothesis. B) forward looking expectation hypothesis. C) permanent-income hypothesis. D) None of the above.
Consumers choose their cellphone plans according to their needs and package features. This is an example of
A) importance of information to consumers' choices. B) importance of making personal budget. C) maximizing an objective that is subject to a constraint. D) minimize the cost of cellphone usage.
________ analysis addresses the question of whether a policy should be used, while ________ analysis addresses the economic consequences of a particular policy.
A. Positive; normative B. Fiscal; monetary C. Monetary; fiscal D. Normative; positive