Assume that the size of the underground economy increases both absolutely and relatively over time. As a result:
A. real GDP will rise more rapidly than nominal GDP.
B. GDP will tend to increasingly understate the level of output through time.
C. GDP will tend to increasingly overstate the level of output through time.
D. the accuracy of GDP will be unaffected through time.
B. GDP will tend to increasingly understate the level of output through time
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The unemployment rate is equal to
A) (number of unemployed people ÷ number of employed) × 100. B) (number of employed people ÷ labor force) × 100. C) (number of unemployed people ÷ labor force) × 100. D) (number of unemployed people ÷ working-age population) × 100. E) (labor force ÷ population) × 100.
Consider an identical basket of goods in both the U.S. and Taiwan. For a given nominal exchange rate, in which case is it certain that the U.S. real exchange rate with Taiwan falls?
a. the price of the basket of goods rises in the U.S. and Taiwan. b. the price of the basket of goods rises in the U.S. and falls in Taiwan. c. the price of the basket of goods falls in the U.S. and rises in Taiwan. d. the price of the basket of goods falls in both the U.S. and Taiwan.