GDP excludes most nonmarket transactions. Therefore, GDP tends to ________.
A. underestimate the rate of inflation in the economy
B. overestimate the rate of inflation in the economy
C. underestimate the amount of production in the economy
D. overestimate the amount of production of the economy
Answer: C
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Exemptions are more desirable than deductions for a person in the 36% tax bracket.
A. True B. False C. Uncertain
In the very long run, the level of consumption per worker can grow continually if
A) the saving rate continually falls. B) the population growth rate continually rises. C) productivity continually improves. D) the depreciation rate continually rises.
A decline in U.S. interest rates causes the U.S. dollar to depreciate, making U.S. exports more attractive and imports less attractive. As a result, exports increase, imports decrease, and net exports increase, resulting in an increase in aggregate quantity demanded. This is an example of the _____
a. interest rate effect b. exchange rate effect c. wealth effect d. accelerator effect
Your bike is worth $100 and if you park it outside at school there is a 25% chance that it will be stolen. Your utility function for money is 
. Assume throughout that the bike value and money are interchangeable since you could sell the bike instantly at its value if necessary. What is the maximum you will pay for the bike check-in now?
What will be an ideal response?