Monitoring the performance of the people managing the firm is easiest in the case of
A) proprietorships.
B) partnerships.
C) corporations.
D) S corporations.
Answer: A
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Government revenue from an excise tax of a given amount is greater when demand is relatively inelastic than when it is relatively elastic
Indicate whether the statement is true or false
The rate at which aggregate supply changes to restore equilibrium at potential output depends crucially on:
a. how quickly planned investment spending adjusts to changes in population growth b. how quickly planned consumption spending adjusts to changes in the price level and nominal wages. c. how quickly technology changes to increase aggregate supply. d. whether the economy is experiencing a recessionary gap or an expansionary gap. e. how quickly real wages adjust to restore full employment in the labor market.
The level of long-run real GDP that producers are willing and able to supply ______.
a. varies inversely with the price level b. increases with increasing price level c. is not affected by changes in the price level d. decreases with increasing price level
Answer the following statements true (T) or false (F)
1. Do-it-yourself activities of people are a big part of the "underground economy". 2. When businesses have to install anti-pollution equipment to clean up their wastes, they are adding to GDP. 3. GDP tends to understate economic welfare because it does not take into account increases in leisure. 4. All activities included in GDP serve to enrich society. 5. Most activities in the so-called underground economy are illegal activities involving drugs or gambling, for example.