Suppose Gerald works for Lola as a production assistant. Gerald and Lola fall in love, get married and have children. Gerald stops working for Lola in order to care for the children. What will be the effect of this scenario on GDP?
A) GDP will increase.
B) GDP will decrease.
C) GDP will not change.
D) GDP may increase or decrease depending on the rate of inflation.
B
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If the price of a one good increases and the quantity demanded of a different good decreases, then these two goods are
A) substitutes. B) normal goods. C) inferior goods. D) inelastic goods. E) complements.
Refer to Figure 13-1. Ceteris paribus, an increase in households' expectations of their future income would be represented by a movement from
A) AD1 to AD2. B) AD2 to AD1. C) point A to point B. D) point B to point A.
In a perfectly competitive market, when the price is below the minimum average total cost for all firms:
A. accounting profits will be positive. B. firms will likely enter the market. C. the price will eventually rise once enough firms have left the market. D. economic profits will be equal to zero.
The most effective form of business organization for raising money to finance the expansion of its facilities and capabilities is a:
A. partnership. B. conglomerate. C. sole proprietorship. D. corporation.