Which of the following items can you definitively say is part of the underground economy?
A. Income from legal pursuits.
B. Payments to family members for performing household tasks.
C. Unreported income.
D. Child care services provided by a legitimate company.
Answer: C
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The owner of a produce store found that when the price of a head of lettuce was raised from 50 cents to $1, the quantity sold per hour fell from 18 to 8. The arc elasticity of demand for lettuce is
A) -0.56. B) -1.15. C) -0.8. D) -1.57.
Discuss the components of GDP using the expenditure approach
If the Fed wants to lower interest rates, it should
A. increase the discount rate. B. increase the reserve ratio. C. buy government securities in the open market. D. sell government securities in the open market.
Exhibit 12-2 Unemployment categories Category# ofIndividuals Frictional unemployment 20 Structural unemployment 35 Cyclical unemployment 60 Discouraged workers 5 Underemployed workers 10 Fully employed workers410 Population900 Consider an economy made up of 100 people, 50 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The unemployment rate is approximately:
A. 10 percent. B. 12 percent. C. 17 percent. D. 20 percent.