GDP Overstates the Productive Capacity of a Country When

question 22

Multiple Choice

GDP overstates the productive capacity of a country when:

• A) economic bads like pollution are produced and then must be cleaned up.
• B) there is a sizable underground economy.
• C) nonmarket production represents a large portion of the economy.
• D) working conditions improve, allowing jobs to be completed safer and faster.

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Definitions:

Par Value

A nominal face value assigned to shares of stock by the issuing company, which often bears no relation to the market value.

Common Stock

Common stock represents shares of ownership in a corporation, giving holders voting rights and a share in the company’s profits through dividends.

Serial Bonds

Bonds of a single issue that mature in installments at regular intervals.