Prices are used in national income accounting for all of the following reasons except to
A. Compare the value of output of one period with that of another.
B. Add the values of output from different sectors of the economy.
C. Provide an index to measure unemployment.
D. Provide an index to measure the rate of inflation.
Answer: C
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In order for "limit pricing" to be effective, the firm practicing such a strategy must be able to charge a price that is:
A) lower than the potential entrant's ATC but greater than the firm's own ATC. B) greater than the potential entrant's ATC but lower than the firm's own ATC. C) lower than the potential entrant's ATC but greater than the firm's own AVC. D) greater than the potential entrant's ATC but lower than the firm's own AVC.
The IS model implies that a dollar of government spending has a larger impact on equilibrium output than does a dollar of taxes. Explain
What will be an ideal response?