The measurement of GDP handles underground production by
A) including the amount produced in this sector of the economy in exactly the same way that all other production is included.
B) omitting it because underground production is unreported to the government by the people involved.
C) adding it at fixed prices that change only infrequently.
D) adding an estimate of it because it is difficult to precisely measure underground production.
E) omitting it because, being illegal, it has no effect on the nation's total production.
B
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According to the quantity theory of money, changes in the price level are the result of changes in the
A) prime interest rate. B) real interest rate. C) quantity of money. D) velocity of circulation.
Suppose the AD curve and the SRAS curve intersect to the left of the LRAS curve. Which of the following is true?
A) The economy is in a recessionary gap. B) The economy is in an inflationary gap. C) The economy is in a long-run equilibrium. D) This situation is actually impossible.
Research indicates that Medicaid has a significant impact on enrollee behavior. Which of the following statements is not true?
a. Medicaid enrollees use more emergency department services than the uninsured. b. Many individuals, especially women with small children, will refuse to accept jobs in order to maintain Medicaid eligibility. c. Because they are not required to pay premiums, Medicaid enrollees have higher savings rates. d. A significant number of low-income jobholders drop private insurance coverage when they qualify for Medicaid. e. Medicaid coverage is associated with worse health outcomes than either private insurance or even no insurance at all.
The net increase in a country's stock of international reserves over a year is called a(n):
A. trade surplus. B. balance-of-payments deficit. C. trade deficit. D. balance-of-payments surplus.