Question :
51) GDP handles household production by
A) estimating a dollar value : 1228218
51) GDP handles household production by
A) estimating a dollar value of the goods purchased to do housework.
B) estimating a dollar value of the services provided.
C) ignoring it.
D) including it in exactly the same way that all other production is included.
E) including it in real GDP but not in nominal GDP because there are no prices paid for the work.
52) The underground economy ________.
A) is measured by government officials through tax returns
B) is difficult to describe but easy to measure
C) includes production that uses illegal workers who are paid less than minimum wage
D) includes mining production
E) is estimated by the government and the estimate is part of official GDP
53) You hire some of your friends to help you move to a new house. You pay them a total of $200 and buy them dinner at Pizza Hut. Which of the following is true?
A) The $200 should be counted as part of GDP but not the dinner at Pizza Hut.
B) If your friends do not report the $200 on their tax forms, it becomes part of the underground economy.
C) The dinner at Pizza Hut should be counted as part of GDP but not the $200.
D) Hiring your friends is an illegal activity and should not be counted in GDP.
E) Neither the $200 nor the dinner should be counted in GDP because both are household production.
54) The value of leisure time is
A) included in GDP and, in recent years, has become an increasing large part of GDP.
B) excluded from GDP.
C) zero.
D) directly included in GDP but, in recent years, has become a decreasing large part of GDP.
E) directly included in GDP and, in recent years, has not changed much as a fraction of GDP.
55) Leisure time ________.
A) is less valuable to us than the wage we earn for working
B) has steadily decreased over the years
C) is not valued as part of GDP
D) is not an economic good
E) is included in GDP and has become an increasingly large part of GDP
56) When industrial activity increases ________.
A) GDP decreases because of pollution
B) pollution does not necessarily increase
C) health and life expectancy decrease
D) and real GDP increases, it is the case that in all nations fewer resources are devoted to protecting the environment
E) the increase in real GDP is partially offset by the increase in pollution
57) A new technology is discovered that results in all new cars producing 50 percent less pollution. The technology costs nothing to produce and cars do not change in price. As a result of the technology, there is a reduction in the number of visits people make to the doctor to complain of breathing difficulties. Which of the following is true?
A) Real GDP decreases as a result of fewer doctor services being provided.
B) Real GDP is not affected.
C) Nominal GDP increases to reflect the improvement in the health of the population.
D) Real GDP decreases to reflect the decrease in pollution.
E) Nominal GDP does not change and real GDP increases.
58) A country with a real GDP per person similar to real GDP per person in the United States but with limited political freedom is generally considered to have ________.
A) a lower standard of living than the United States
B) a larger Human Development Index because the other country still needs to develop more political freedom
C) the same standard of living as the United States
D) an understated GDP
E) an overstated nominal GDP
