Growth in GDP systematically understates the growth in national well-being because
A. ecological costs are netted out of GDP.
B. “bads” as well as “goods” get included in GDP.
C. investment is not included in GDP.
D. as a country gets richer, leisure time increases.
Answer: D
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The short-run aggregate supply curve slopes upward because: a. firms normally can purchase some inputs at prices that are temporarily fixed in the short run. b. firms seek maximum profits and always try to increase output in the short run
c. firms purchase inputs that increase in price as the price level rises in the short run. d. All of the above are correct.
The evidence on how minimum wage laws affect the real world:
A. shows clearly that such price floors cause unemployment. B. is mixed. C. shows clearly that there is simply a transfer of surplus from employer to worker. D. None of these statements is true.
A new country has been established on the moon and created a currency called cheesybits. Which of the following does not involve a foreign exchange transaction?
A. Luna lives on the moon and wants to travel to visit relatives in Japan. B. Moonrock corporation needs new mining equipment that it buys from a manufacturer in Russia. C. Moonbeam Incorporated, the largest company on the moon, sells building products for houses on the moon. D. Han is visiting the moon and wants to eat at his favorite restaurant, the Moonglow Bar and Grill.
It has become conventional to classify an economic downturn as a ________ when aggregate ________ declines for two consecutive quarters.
A. trough; demand B. recession; output C. depression; supply D. deflation; spending