Over? time, prices may change relative to each other. To take this change into? account, the Bureau of Economic Analysis calculates
A.real GDP using the prices in the current year.
B.real GDP using chain weights.
C.real GDP and nominal GDP using only base-year prices.
D.nominal GDP using chain weights
Answer: B.real GDP using chain weights.
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When tax revenues ________ outlays is positive, then the government has a budget ________
A) plus; deficit B) minus; deficit C) minus; surplus D) plus; surplus E) divided by; surplus
Refer to Figure 8.1. Holding other variables constant, a decrease in the capital stock will result in a
A) shift from curve D1 to curve D2. B) shift from curve D2 to curve D1. C) movement from point A to point B. D) movement from point B to point A.
Fiscal policy is enacted through changes in:
A. taxation and government spending. B. interest rates. C. unemployment and inflation. D. the supply of money.
Keynes assumed that wages and prices were slow to adjust in order to explain
A. why inflation fell in recessions. B. persistently high unemployment. C. the high level of interest rates. D. high inflation.