In Recent Years, Technological Improvements and the Internet Have Substantially

question 191

Multiple Choice

In recent years, technological improvements and the Internet have substantially reduced transaction costs and expanded the availability of low-cost access to information, communications, and entertainment. Most economists believe that these changes

• A) cause GDP to overstate the growth rate of real output and the improvement in the well-being of people.
• B) cause GDP to understate the growth rate of real output and the improvement in the well-being of people.
• C) cause the consumer price index to increase more rapidly than the general level of prices.
• D) reduce the gains from trade and thereby cause GDP to decline.

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Definitions:

Financial Statements

Documents that present an organization's financial performance and position, including the income statement, balance sheet, and cash flow statement.

Liabilities

Financial obligations or debts owed by a business to others, which must be settled over time through the transfer of economic benefits including money, goods, or services.

Stockholders' Equity

Stockholders' equity represents the residual interest in the assets of a corporation after deducting liabilities, essentially the net worth of the company.

Cash Dividend

A payment made by a corporation to its shareholders, usually as a distribution of profits.