You are to explain your answer to whether the statement is true or false? 1. Gross...

You are to explain your answer to whether the statement is true or false?

1. Gross domestic product measures the value of all goods and services produced in an economy during a period of time.

2. The unemployment rate only goes down when the economy is in recovery.

3. The business cycle has four phases, depression, recession, recovery and expansion.

4. People who are discouraged workers are included in the unemployment rate.

5. The consumer price index is an accurate measure of the change in the purchasing power of money.

6. Consumption is the largest component of Gross Domestic product as measured by the income approach.

7. Absolute advantage is the same as comparative advantage.

8. Money is a social institution that eliminates the need for a double coincidence of wants.

Solutions

Expert Solution

Answer option)false

It is false that Gross domestic product measures the value of all goods and services produced in an economy during a period of time

The reason is that Gross domestic product measures market value of final goods and services produced during an accounting year.

Answer option) false

It is false that The unemployment rate only goes down when the economy is in recovery.Unemployment tends to rise quickly, and often remain elevated, during a recession.

Answer option) true

It is true that The business cycle has four phases, depression, recession, recovery and expansion.

Answer option)false

It is falsePeople who are discouraged workers are included in the unemployment rate.

Even though they would like a job, discouraged workers are not counted as unemployed or included in the unemployment rate. They are counted in the real unemployment rate. Discouraged workers do not include those who have dropped out of the labor force for other reasons.

Answer Option)true

The consumer price index (CPI) is a measure of the average change over time in the prices paid by consumers in urban households for a basket of goods and services. ... The CPI is calculated by taking price changes for each item in the predetermined basket of consumer goods and services and then averaging them.

Rahul Sunny answered 1 year ago

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