New houses count as consumer durables.
Answer the following statement true (T) or false (F)
False
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You hire some of your friends to help you move to a new house. You pay them a total of $200 and buy them dinner at Pizza Hut. Which of the following is true?
A) Hiring your friends is an illegal activity and should not be counted in GDP. B) Neither the $200 nor the dinner should be counted in GDP because both are household production. C) The dinner at Pizza Hut should be counted as part of GDP, but not the $200. D) The $200 should be counted as part of GDP but not the dinner at Pizza Hut. E) If your friends do not report the $200 on their tax forms, it becomes part of the underground economy.
Since 2004, the Fed has focused on a core price index that excludes food and energy prices to measure inflation because
A) food and energy are necessities, so consumers have no choice but to purchase these. B) food and energy prices tend to remain stable in the short run, so are not relevant to the calculation of inflation. C) including food and energy prices tends to overstate the true inflation rate by 0.5% to 1%. D) food and energy prices tend to fluctuate up and down for reasons that may not be related to the general causes of inflation.
If Stock A sometimes increases and sometimes decreases in value when Stock B increases in value at the same time, they are
A) negatively correlated. B) uncorrelated. C) positively correlated. D) random bets.
The principle that the opportunity cost increases as the production of one output expands along the production possibilities curve is the:
a. law of increasing opportunity costs. b. law of supply. c. law of demand. d. law of diminishing returns.