Why might incomes of $1 a day and $2 a day underestimate the value of the goods and services that these households actually consume?
What will be an ideal response?
The people living on $1 and $2 a day probably grow a lot of their food and produce a lot of their clothing and shelter. If these goods and services are not taken into account, their share of goods and services is understated. Including them raises the value of the goods and services these
You might also like to view...
Free riders often result in
A. overallocation of resources. B. competitive markets. C. scarcity of time. D. market failure.
Assuming the price level has not changed, how would an increase in the aggregate demand affect real GDP?
A) It only changes with changes in exports. B) It increases. C) It only changes with changes in imports. D) It decreases.
Lower inflation is usually accompanied by
a. lower nominal interest rates b. lower real interest rates c. higher nominal interest rates d. higher real interest rates e. zero real interest rates
Which type of model can account for all types of allocating and coordinating mechanisms, even those without explicit money prices?
A. Butterfly effect B. Expression C. Shadow price D. Path-dependent