International per capita GDP comparisons are misleading when countries involved differ greatly in
a. the type of economic system each country uses to solve its economic problem.
b. the freedom of their election processes.
c. the percentage of economic activity that is transacted in organized markets.
d. the quantity of human and natural resources they possess.
c
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Provide an example of each allocation method that illustrates when it works badly
What will be an ideal response?
Household wealth is defined as the value of a household's
A) assets minus the value of its liabilities. B) liabilities. C) assets plus the value of its liabilities. D) assets.
Economists define investment as the purchase of
A) a new physical asset such as a new machine or a new house. B) any physical asset, whether new or not, used by business to increase production. C) any physical asset used by business to increase production and the repurchase of common stock. D) business spending on capital and household spending on durable goods.
Suppose the U.S. dollar depreciates, and there is no change in monetary policy. Which of the following is a correct description of the short-run consequences?
A) output, inflation, and the real interest rate have all increased B) output, inflation, and the real interest rate have returned to their original values C) output and inflation are higher, while the real interest rate has fallen D) output and inflation have returned to their original values, while the real interest rate is increased