The calculation of GDP does not account for the following:
a. Value of goods and services
b. ??
c. ??
d. Value of the investment
e. Both b and c
e. Both b and c
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If tastes are Cobb-Douglas, they can be represented by a utility function that is homogeneous of degree k where k can take on any positive value.
Answer the following statement true (T) or false (F)
One reason financial systems in developing and transition countries are underdeveloped is
A) they have weak links to their governments. B) they make loans only to nonprofit entities. C) the legal system may be poor making it difficult to enforce restrictive covenants. D) the accounting standards are too stringent for the banks to meet.
If the government budget is balanced, and saving is greater than investment, then the
a. current account must be in surplus. b. current account must be in deficit. c. current account balance must be zero. d. capital account must be in surplus.
The simple spending multiplier is the inverse of the marginal propensity to consume
a. True b. False Indicate whether the statement is true or false