Which of the following is a problem when comparing GDPs per capita between nations?
A. GDP per capita only measures income distribution.
B. Fluctuations in exchange rates affect differences in GDP per capita.
C. GDP per capita is subject to greater measurement errors for IACs compared to LDCs.
D. GDP per capita is likely overstated in LDCs due to families producing goods and services outside of the pricing system.
Answer: B
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Following adjustments to a new equilibrium in a market, the equilibrium quantity remains unchanged, but the market clearing price is now lower. Which of the following could definitely have caused this outcome?
A) Demand and supply both increased. B) Demand and supply both decreased. C) Demand increased, and supply decreased. D) Demand decreased, and supply increased.
Inflation in the U.S. economy tends to be:
A. a finite, one-time event resulting from a shock. B. ongoing, as increases in aggregate demand generally exceed the increases in aggregate supply. C. a finite, one-time event as the Fed actively works to eliminate all inflation. D. ongoing, as aggregate supply is continually shifting to the left.