One In the News article states that the underground economy includes transactions that are untaxed or unaccounted for in GDP. According to this article, the underground economy
A. Involves a small percentage of households.
B. Includes only illegal transactions.
C. Impacts the amount of tax dollars collected by the IRS.
D. Is captured in GDP.
Answer: C
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As the case study in the text illustrates, individual firms in the potato industry have a great deal of market power
Indicate whether the statement is true or false
Stability and equity are two principles associated with
a. private goods as opposed to public goods b. public goods, such as public assistance and defense c. merit goods, such as public assistance and agriculture d. transfer payment programs, such as education and natural resources e. transfer payment programs, such as public assistance and agriculture
Abby buys health insurance because she knows that she has health risks that wouldn't be obvious to an insurance company. Brad buys home owners insurance and then is less careful to make sure he's put out his cigarettes. The example with Abby
a. and the example with Brad illustrate adverse selection. b. and the example with Brad illustrate moral hazard. c. illustrates adverse selection; the example with Brad illustrates moral hazard. d. illustrates moral hazard; the example with Brad illustrates adverse selection.
If a manager has determined that a particular piece of capital is likely to increase the cash flow of a business by $10,000 for the next five years, what is the present value of the capital at an interest rate of 10 percent? (Assume that the cash flow first increases one year from today.)
What will be an ideal response?