What would be expected to happen to the size of the underground economy if:
a. businesses tax rates decreased.
b. government regulations on businesses increased dramatically.
c. the sale and use of marijuana was legalized in all 50 states.
a. A decrease in business taxes would tend to decrease the size of the underground economy.
b. An increase in regulations on businesses would tend to increase the size of the underground economy.
c. Legalized sale and use of marijuana would tend to decrease the size of the underground economy.
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Which of the following statements is FALSE?
A) An increase in income causes an increase in the demand for a normal good. B) An increase in income causes a decrease in the demand for an inferior good. C) A decrease in income causes the demand curve for a normal good to shift to the left. D) An increase in income causes the demand curve for an inferior good to shift to the right.
The problem with using foreign exchange rates to convert one country's GDP into dollars is that
A. exchange rates do not reflect differences in inflation rates. B. not all goods and services are sold on world markets. C. the dollar has been losing value over the last twenty years. D. the values of currencies are not comparable.