Answer the following statements true (T) or false (F)
1. Do-it-yourself activities of people are a big part of the "underground economy".
2. When businesses have to install anti-pollution equipment to clean up their wastes, they are adding to GDP.
3. GDP tends to understate economic welfare because it does not take into account increases in leisure.
4. All activities included in GDP serve to enrich society.
5. Most activities in the so-called underground economy are illegal activities involving drugs or gambling, for example.
1. FALSE
2. TRUE
3. TRUE
4. FALSE
5. FALSE
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An increase in expected inflation will
A) decrease the natural rate of unemployment. B) increase real wages. C) shift the long-run Phillips curve to the right. D) None of the above is correct.
Which of the following transactions is a debit in the US current account?
A) Export of merchandise B) Export of services C) Gifts to foreigners D) Foreign bond purchases