To move from gross domestic product (GDP) to gross national product (GNP), one must:
A. add depreciation to GDP.
B. subtract depreciation from GDP.
C. add net foreign factor income to GDP.
D. subtract net foreign factor income from GDP.
Answer: C
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The Laffer curve illustrates that
A) high tax rates could lead to lower tax revenues if economic activity is severely discouraged. B) lowering tax rates will always decrease tax revenues. C) lowering tax rates will always increase tax revenues. D) high tax rates would increase tax revenue and increase the labor supply as people work harder to maintain their standard of living.
Provide an example of each type of externality that is different from the ones described above
What will be an ideal response?
The more that firms in an economy believe that the demand for their goods is mainly influenced by the aggregate level of demand and not "local conditions," the ________ is the SAS curve and thus the ________ are cycles in real GDP
A) steeper, larger B) steeper, smaller C) flatter, larger D) flatter, smaller
Some unemployment is unavoidable because ________.
A) many people in the working-age population attend school and are unemployed B) people are making transitions through the stages of life and businesses are making transitions C) often people become discouraged workers D) there is always some cyclical unemployment E) many part-time workers would like to have full-time work