Government intervention in agriculture usually involves
A) price ceilings in order to keep food prices low.
B) price ceilings in order to subsidize U.S. exports.
C) price supports in order to keep farm incomes high.
D) price supports in order to keep agricultural imports low.
Answer: C
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GDP understates the value of output produced by an economy because it
A) includes environmental degradation caused by increased output production. B) includes transactions that do not take place in organized markets, such as home-cooked meals. C) excludes value added from the underground economy, such as tips taken "under the table." D) excludes the value of the wages and benefits of government employees.
If actual inflation is greater than expected inflation
A) the Phillips curve is a vertical line. B) real wages fall. C) real wages rise. D) the unemployment rate rises.
In the real business cycle model, output and employment are
a. determined by real supply-side variables. b. determined by supply and demand factors. c. always at their natural rates. d. both a and c. e. None of the above
To determine the total demand for all consumers, sum the quantity each consumer demands
A) at a given price. B) at all prices and then sum this amount across all consumers. C) Both A and B will generate the same total demand. D) None of the above.