Question : 21) GDP not a perfect measure of well-being because A) the : 1244684

21) GDP is not a perfect measure of well-being because

A) the value of leisure is included in GDP.

B) GDP is not adjusted for pollution.                     

C) GDP is adjusted for changes in crime rates.

D) GDP is adjusted for increases in drug addiction.

22) Which of the following accurately describes an effect of hurricane Katrina on GDP?

A) GDP would decrease reflecting the costs of cleanup.

B) GDP would increase reflecting the costs of cleanup.                     

C) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm.

D) GDP would increase well-being.

23) The underground economy can be described as

A) production of intermediate goods and services.

B) economic production that includes mining.

C) economic activity that is hidden from the government to avoid taxes or because the activity is illegal.

D) production of infrastructure that spurs growth in the rest of the economy.

24) Which of the following is counted in GDP?

A) the value of goods and services produced in the underground economy

B) the cost of a speed boat purchased by drug smugglers

C) the value of do-it-yourself work

D) the value of leisure

25) Marla is an architect who is designing a home for Chuck. Chuck is paying Marla $150 per hour to design his new home. When Chuck and Marla get married, Marla continues to work on designing the home, but she no longer charges Chuck for her work. As a result, GDP ________ because ________.

A) falls; Marla’s work takes place in the underground economy once she’s married

B) falls; Marla’s work becomes less valuable once she’s married

C) falls; Marla’s architectural design services are no longer bought by Chuck once they’re married

D) rises; Marla becomes more productive once she’s married

26) “Household production” refers to

A) the manufacturing of durable household products.

B) the home building sector of the economy.

C) home-based craft businesses.

D) goods and services people produce for themselves.

27) The “underground economy” is also referred to as

A) the informal sector.

B) the formal sector.

C) the halfway economy.

D) the net domestic product economy.

28) In an “underground economy,” the production of goods and services

A) are not measured nor included in GDP.

B) are not measured but are included in GDP.

C) are measured and included in GDP.

D) are usually too insignificant to be included in GDP.

29) Scott is a woodworker and charges $125 an hour for his time manufacturing custom-made wood products. For his wife’s birthday, he designs and creates an intricate birdseye maple jewelry box that takes him 15 hours to complete. By how much and in what direction does GDP change as a result of his efforts?

A) GDP rises by $1,875.

B) GDP is not affected by Scott’s production of the jewelry box.

C) GDP rises by $125.

D) GDP falls by $1,875.

30) The “underground economy” refers to

A) the buying and selling of goods that is concealed from the government.

B) the production of goods and services used by the government for covert spy operations.

C) the sector of the economy that earns profits that are higher than average.

D) the formal sector of the economy in developing countries.