Many financial analysts use GDP as a measure of the economy's performance. However, GDP has several shortcomings in terms of measuring economic well-being
State at least three such shortcomings and explain how each affects the validity of GDP as a measure of economic well-being.
1 ) GDP does not include the value of non-market activities such as house cleaning by you and your spouse, which would understate economic well-being.
2 ) GDP does not reflect the adverse effects of pollution that reduces economic well-being.
3 ) GDP does not capture the value of leisure time. If leisure time is being reduced, economic well-being could decrease.
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Explain the difference between price cap regulation in a natural monopoly and the effect of a price ceiling in a competitive market
What will be an ideal response?
The present membership in the Federal Reserve System includes
a. all the commercial banks in the nation. b. less than half of the commercial banks in the nation. c. only the Federal Reserve Banks and their branches. d. commercial banks, savings & loans, and credit unions.
Is a monopolistically competitive firm allocatively efficient?
A) No, because it does not produce at minimum average total cost.
B) Yes, because price equals average total cost.
C) No, because price is greater than marginal cost.
D) Yes, because it produces where marginal cost equals marginal revenue.
The balance of payments deficit is the amount by which the quantity supplied of a country’s currency (per year) exceeds the quantity demanded..
Answer the following statement true (T) or false (F)