Answer the following statements true (T) or false (F)
1. Constant-dollar GDP can be converted into current-dollar GDP by multiplying the real GDP by the implicit price defoliators
2. The GDP does not include raw materials used up in the productive process.
3. The GDP makes no measurement of the deterioration of the natural environment.
4. National income is equivalent to total earnings in the form of wages, rent, interest, and profits.
5. Transfer payments are added to NI in the process of determining personal income.
1. TRUE
2. TRUE
3. TRUE
4. TRUE
5. TRUE
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Which describes the economic meanings of value and price?
A) Value is exchange worth minus marginal benefit, and price is the dollars that must be paid. B) Value is the marginal benefit obtained, and price is the dollars that must be paid. C) Value refers to the gain the producer gets from the good or service, and price refers to the gain the consumer gets from the good or service. D) Value refers to the dollars that must be paid, and price refers to the cost of producing the good. E) They are the same and both mean the dollars that must be paid.
When a nation has a comparative advantage in the production of a particular good
A) the nation tends to avoid specialization. B) the comparative advantage encourages self-sufficiency. C) the opportunity cost of producing that good is higher than that of other goods. D) the nation can gain from trade.