GDP overstates the productive capacity of a country when:
A. economic bads like pollution are produced and then must be cleaned up.
B. there is a sizable underground economy.
C. nonmarket production represents a large portion of the economy.
D. working conditions improve, allowing jobs to be completed safer and faster.
Answer: A
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The problem of scarcity
A. has been “cooked up” by disenchanted anticapitalists. B. exists because resources are limited relative to wants. C. is solved by promoting economic growth. D. is caused by artificially high prices.
Monetizing the budget deficit
A) creates a full-employment deficit that exceeds the actual deficit. B) occurs when the Treasury sells bonds to businesses. C) helps stabilize the economy. D) leads to increases in the money supply.
An increase in real GDP can shift
A) money demand to the left and increase the equilibrium interest rate. B) money demand to the right and increase the equilibrium interest rate. C) money demand to the right and decrease the equilibrium interest rate. D) money demand to the left and decrease the equilibrium interest rate.
Assume that gross national product amounts to $4300.5 billion, depreciation is $550.1 billion, and indirect taxes are $399.3 billion. Then, net national product amounts to
a. $3351.1 billion. b. $4549.8 billion. c. $3851.2 billion. d. $3750.4 billion.