GDP tends to overstate economic well-being because it takes into account ________.
A. improvements in product quality over time
B. expenditures undertaken to correct pollution
C. nonmarket activities, such as the productive work of homemakers
D. illegal activities of individuals and businesses
Answer: B
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Assuming a required reserve ratio of 5%, interest rate on reserves of 1%, and interest rate on loans of 6%, what is the effective cost of the reserve requirement on a $10,000 deposit?
A) 0.05% B) 0.25% C) 0.30% D) 1%
What are the marginal propensity to consume and level of autonomous consumption spending for a consumption function of the following form: C = 1,200 + 0.5DI?
a. The marginal propensity to consume is 0.5; autonomous consumption spending is $0.50. b. The marginal propensity to consume is 0.5; autonomous consumption spending is $1,200. c. The marginal propensity to consume is 1,200; autonomous consumption spending is $0.50. d. The marginal propensity to consume is 1,200; autonomous consumption spending is $600. e. There is insufficient information to answer this.