Which of the following is the most likely side effect of an increase in the relative size of the underground economy with the passage of time?
a. The growth rate of real GDP will tend to understate the growth rate of total output.
b. The growth rate of real GDP will tend to overstate the growth rate of total output.
c. The GDP deflator will tend to overstate any increase in inflation.
d. The GDP deflator will tend to understate any increase in inflation.
a
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If workers expect inflation, and negotiate wage increases that exactly match price increases, the result is a
a. horizontal aggregate supply curve at the level of potential GDP. b. vertical aggregate supply curve at the level of potential GDP. c. horizontal aggregate demand curve at the level of potential GDP. d. vertical aggregate demand curve at the level of potential GDP.
In order to derive an individual's demand curve for salmon, we would observe what happens to the utility-maximizing bundle when we change
A) income and hold everything else constant. B) tastes and preferences and hold everything else constant. C) the price of the product and hold everything else constant. D) the price of a close substitute and hold everything else constant.