The value of all final goods and services produced domestically in the "underground economy" are not recorded as a part of GDP because production and sale of these goods are either illegal or hidden from tax authorities
Indicate whether the statement is true or false
true
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A decrease in ________ leads to an equal ________ in the monetary base in the short run
A) float; increase B) float; decrease C) Treasury deposits at the Fed; decrease D) discount loans; increase
If a Federal Reserve Bank wanted to tighten the money supply, it would
a. lower the reserve requirement. b. buy securities in the open market. c. raise the discount rate. d. lower the discount rate.
In the short run, if prices were above equilibrium,
a. excess aggregate demand for goods and services would place downward pressure on prices. b. excess aggregate supply of goods and services would place upward pressure on prices. c. excess aggregate demand for goods and services would place upward pressure on prices. d. excess aggregate supply of goods and services would place downward pressure on prices.
Which of the following explains why business owners have a strong incentive to strive for operational efficiency?
a. they recognize that operational efficiency promotes the public interest. b. since the owners are residual income claimants, increased efficiency will mean a higher income for the owners. c. if production is not conducted efficiently, the firm will ship jobs and capital out of the domestic market in order to be able to compete effectively. d. Increased operational efficiency allows the firm to receive government tax breaks.