Explain whether it is possible for nominal GDP to increase and real GDP to decrease in the same period
What will be an ideal response?
Nominal GDP can rise because either the price level is rising or the real quantity of goods and services produced has increased. Nominal GDP can increase while real GDP falls if the increase in the aggregate price level is larger (in a proportionate sense) than the drop in real economic activity.
You might also like to view...
The board of a U.S. corporation usually includes
A) outside directors. B) executives of competitors. C) non-executive employees of the corporation. D) All of the above.
The Law of Supply states that when the market price ______, the profit-maximizing sales quantity for a price taking-firm never ______.
A. increases; increases B. increases; decreases C. decreases; decreases D. decreases; stays the same
A car sells at different prices at different dealerships in an oligopolistic market. If a consumer has imperfect information about the price of a car at each dealership, the consumer should
A. always gather all available information about prices. B. gather information about prices until the expected marginal utility of more information equals the marginal cost of gathering it. C. gather information about prices only if it can be gathered without cost. D. ignore information about prices because it is irrelevant to making an “optimally imperfect” decision.
Economists assume the central goal of any business is to:
A. minimize costs. B. maximize market share. C. maximize profit. D. maximize revenues.