The basic function of advertising, according to its proponents, is to assist consumers in making informed, rational choices.

Using the chained-dollar method to calculate real GDP, real GDP is calculated by

A) valuing the current output at last year's real GDP prices. B) valuing the current output at current year prices. C) averaging the growth of output from one year to the next when the growth rates are calculated using this year's prices and using last year's prices. D) either A or C, depending which gives the larger value for real GDP. E) averaging the value of current output valued using base year prices and current output valued using current year prices.

Economists who believe that real GDP may grow slowly because of insufficient demand for investment spending cite three main reasons for the low demand for loanable funds. Which of the following is not one of those reasons?

A) a reduced demand for housing due to slowing population growth B) the continued decrease in the value of the dollar relative to the currencies of major U.S. trading partners C) a smaller capital requirement for modern information technology firms D) the falling price of capital relative to other goods