Economists generally use gross domestic product to measure a nation's total output because it
a. equals the sales value of all transactions conducted during a period and, thus, can be easily calculated.
b. is the best available measure of the market value of all final goods and services produced during a period.
c. is unaffected by changes in the prices of products over time.
d. is a reliable indicator of the social progress of a nation over time.
B
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Refer to Table 9-3. If the required reserve ratio is 10% and the market interest rate is 6%, then the opportunity cost of holding excess reserves is
A) zero since Alpha-Beta does not hold any excess reserves. B) $0.9 million. C) $2.4 million. D) $4 million.
Babe Ruth, the famous baseball player, earned $80,000 in 1931 . Today, the best baseball players can earn more than 400 times as much as Babe Ruth earned in 1931 . However, prices have also risen since 1931 . We can conclude that
a. the best baseball players today are about 400 times better off than Babe Ruth was in 1931. b. because prices have also risen, the standard of living of baseball stars hasn't changed since 1931. c. one cannot make judgments about changes in the standard of living based on changes in prices and changes in incomes. d. one cannot determine whether baseball stars today enjoy a higher standard of living than Babe Ruth did in 1931 without additional information regarding increases in prices since 1931.