The GDP figures fail to count labor services and other household production. Once this omission is taken into account,
a. the income differences between the high and low income countries are small.
b. the differences in living standards between the high and low income countries are small.
c. the income differences between the high and low income countries are still huge.
d. the life expectancy in the high and low income countries is approximately the same.
C
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Lolita wants to purchase a beautiful art deco office building built in the 1920s, tear it down, and construct a rather bland, glass-and-steel office building that will confer $2 million of benefits to society. In its current state, the art deco office building is worth $1.7 million. Lolita goes to the city council with her proposal and tells the council members that the new office building will hold more tenants and therefore increase employment and tax revenues. If the city council agrees to use eminent domain to allow Lolita to proceed with her project, society as a whole will
A) be made poorer since eminent domain is a costly process. B) be made poorer since the area will be less aesthetically beautiful. C) be made richer since the project confers benefits that are greater than the current value of the art deco office building. D) not be affected since the project only encompasses one small parcel of land.
The government corporation that insures pension benefits is
A) Fannie Mae. B) Ginnie Mae. C) Penny Benny. D) Sallie Mae.
By the accelerator hypothesis, if a firm's actual sales jump in one period to a higher maintained level, that firm's net investment
A) also jumps in one period to a higher maintained level. B) gradually drifts upward to a higher maintained level. C) jumps upward and then falls back to zero. D) jumps upward and then falls back part of the way.
Rising inflation causes quantity demanded to decline, because ________
A) the central bank raises the nominal interest rate by more than the increase in expected inflation B) households and businesses are reluctant to spend when prices rise C) higher inflation causes the IS curve to shift to the left D) all of the above E) none of the above