You put money into an account. One year later you see that you have 6 percent more dollars and that your money will buy 2 percent more goods
a. The nominal interest rate was 8 percent and the inflation rate was 6 percent.
b. The nominal interest rate was 6 percent and the inflation rate was 4 percent.
c. The nominal interest rate was 4 percent and the inflation rate was 2 percent.
d. None of the above is correct.
B
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Household production is more likely to occur when
a. it requires few specialized resources b. technology makes it more costly than market production c. tax avoidance is undesirable d. less control over the final product is desirable e. the opportunity cost of household production is high
The existence of the underground economy causes gross domestic product (GDP) statistics to _____
a. understate the true volume of economic activity b. overstate the aggregate price level in the economy c. overstate the standard of living d. overstate the profit of firms e. understate government spending in an economy