GDP is a measure of all of the following EXCEPT
A. the total value of expenditures.
B. the overall level of economic activity.
C. the total of production.
D. overall welfare.
Answer: D
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In the circular flow model, the value of total income for an economy ________ the value of total production
A) equals B) is greater than C) may be greater than or less than D) is less than
Structural unemployment is:
A. a mismatch between the skills workers can offer and the skills that are in demand. B. unemployment caused by workers who are changing their location, job, or career. C. the effect of wages remaining persistently above the market-clearing level. D. when workers voluntarily quit their jobs.
Most of the government budget is mandatory spending through programs like Medicare and Social Security, and much of the rest is politically difficult to alter. Because of this:
A. the amount of spending is unlikely to be implemented as economists suggest. B. fiscal policy that involves raising taxes is more likely to be implemented than fiscal policy that involves borrowing money. C. most spending is geared to perform as an automatic stabilizer, so that Congress is in fact largely irrelevant when it comes to providing a fiscal response to a recession. D. fiscal policy is always undertaken only when there is a national crisis that motivates voters to seek change.
If the absolute price elasticity of demand for a product is equal to 1, then
A) the absolute price elasticity of demand is inelastic and consumers are relatively insensitive to price changes. B) the absolute price elasticity of demand is inelastic and consumers are relatively sensitive to price changes. C) the absolute price elasticity of demand is elastic and consumers are relatively insensitive to price changes. D) the absolute price elasticity of demand is unit-elastic and the percentage change in quantity demanded equals the percentage change in price.