When using the income approach to measure GDP at market prices, in addition to summing all factor incomes it is necessary to ________
A. subtract depreciation because profit is not reported as net profit
B. add depreciation because capital depreciates when goods are manu-factured
C. add indirect taxes less subsidies to convert aggregate income from factor cost to market prices
D. add a statistical discrepancy which is the sum of depreciation and in-direct taxes less subsidies
C The discussion on pages 375 and 376 of the text illustrate that answer C is correct.
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The price elasticity of demand is always positive, as is the price elasticity of supply. Is the cross elasticity of demand always positive? Explain your answer
What will be an ideal response?
The demand for a factor of production depends on the:
a. supply of the factor. b. supply of other factors of production. c. demand for other factors of production. d. demand for the products that it helps to produce.