Rachel cuts her sister's hair for free. When she cuts the hair of her customers in her shop, she charges $10 . When is Rachel's haircutting included in GDP?
a. When she cuts her sister's hair or cuts her customers' hair.
b. When she cuts her sister's hair, but not her customers' hair.
c. When she cuts her customers' hair, but not her sister's.
d. Never.
c
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If a price hike of 5 percent increases the quantity demanded of another good by 2 percent, the goods must be ________ and the cross elasticity of demand equals ________
A) substitutes; 0.40 B) substitutes; 2.5 C) complements; 0.40 D) complements; 2.5
Economist Richard Baldwin says the optimism about the Eurozone may be unjustified. His research suggests trade increases in the Eurozone as a result of the currency union:
A) are much larger than previous estimates or forecasts and likely to show future gains. B) are much smaller than previous estimates or forecasts and unlikely to show future gains. C) are less stable and subject to wide variations. D) could be much larger if poor and unstable economies were not in the Eurozone.
When inflation occurs, net exports will
A. increase as imports decrease. B. increase as exports increase. C. decrease as imports decrease. D. decrease as imports increase.
Indirect business taxes refer to
A. dividend taxes paid by the corporation. B. sales and local taxes paid by business. C. payments for low-skilled labor. D. depreciation expenses.