If a new and better good replaced an older and less expensive good, then the price level measured by the CPI ________
A) is lower than the actual price level
B) is higher than the actual price level
C) might be either higher or lower than the actual price
D) is the same as the actual price level because it measures the prices of the actual goods
B
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Suppose that Brazil is capital abundant and Chile is natural resource abundant. If timber is natural resource intensive and computers are capital intensive, then according to the Heckscher-Ohlin Theorem, Chile should export goods that
A) intensively use labor input. B) intensively use capital input. C) intensively use natural resources. D) use capital and labor in about equal proportions.
According to many economists, production that occurs in the underground economy
a. has no market value and therefore should not be included in GDP b. is given too much weight by the Bureau of Economic Analysis, causing GDP to overstate true output c. consists exclusively of illegal production activities such as drug selling and prostitution d. is accurately accounted for by the Bureau of Economic Analysis in its measurement of GDP e. is given insufficient weight by the Bureau of Economic Analysis, causing GDP statistics to understate true output