Question : 31) Which of the following transactions would take place in : 1388293

31) Which of the following transactions would take place in the “underground economy”?

A) Elizabeth tells her mother she’s going to work but really goes to see a movie.

B) Paul buys 15 gallons of gasoline for $3.29 a gallon, not realizing that $1.50 per gallon of that price goes to the government as tax revenue.

C) John makes chain-link belts and necklaces and sells them at a local flea market for cash to avoid paying taxes.

D) Matt bought an iPad for $499 but decided to sell it on eBay instead of keeping it.

32) If a country passes a labor law limiting the number of hours of work per week, GDP would ________ and leisure would ________.

A) decrease; increase

B) increase; increase

C) decrease; decrease

D) increase; decrease

33) If China decides to enact laws to clean up the environment, what would be the effect on GDP?

A) GDP would increase reflecting the fact that the environment would be cleaner.

B) GDP would decrease if the pollution controls reduce productivity by more than the cost of the controls.

C) GDP would increase as the citizens of China were made happier as the environment was cleaned up.

D) GDP would increase as the environmental costs of pollution were not included in the calculation of GDP.

34) Because workers in the United States work fewer hours per week, on average, than they did over 100 years ago,

A) workers in the United States are worse off than they were over 100 years ago.

B) workers in the United States earn less income than they did over 100 years ago.

C) GDP is lower than it would be if U.S. workers worked the same workweek they had 100 years ago.

D) GDP is higher than it would be if U.S. workers worked the same workweek they had 100 years ago.

35) Which of the following is a true statement about the impact of World War II on the U.S. economy?

A) U.S. GDP decreased dramatically from 1941 to 1945.

B) The war time years were a period of prosperity for U.S. consumers.

C) Less than 10% of the labor force was in the military or producing war goods.

D) Increased production of tanks, ships, planes, and munitions accounted for most of the increase in GDP.

36) Developing countries with large informal sectors tend to have firms that invest less in capital equipment.

37) If income is unequally distributed in an economy, increases in GDP may not raise well-being in an economy.

38) Real GDP per capita is calculated by dividing the value of real GDP for a country by the country’s adult population.

39) GDP is not a complete measure of well-being.

40) The size of the underground economy as a percent of GDP is larger in the United States as compared to poorer countries such as Zimbabwe.

41) Economist Robert Higgs showed that World War II brought great increase in the number of consumer goods available to the typical person.

42) If an increase in crime causes households to spend money on police and security systems, GDP will rise.