Discuss the problems with GDP as a measure of a country's current production and income
First, GDP does not count nonmarket production or the underground economy. It fails to take leisure and human costs into account. Its use is complicated by the variation that exists in the quality of goods through time and by the introduction of new goods. Lastly, GDP does not account for harmful side effects and economic bads.
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When an individual's wage rises, the income effect tends to:
a. increase hours worked. b. decrease hours worked. c. leave hours worked unchanged. d. an impossible prediction about what will happen to hours worked.
A perfect competition market has which of the following?
a. Only productive efficiency b. Only allocative efficiency c. Neither allocative or productive efficiency d. Has both allocative and productive efficiency
Which of the following is true?
a. Tax rates do not influence economic growth. b. Countries with high marginal tax rates have generally had higher rates of economic growth than those with low tax rates. c. Countries with low marginal tax rates have generally had higher rates of economic growth than those with high tax rates. d. Countries that impose high marginal tax rates at low-income thresholds generally have high rates of economic growth.
The condition often used in economics to isolate the relationship between two variables is
A) causation. B) abstraction. C) ceteris paribus. D) efficiency.