Assume an economy that makes only one product and that year 3 is the base year. Output and price data for a five-year period are as follows. Answer the question on the basis of these data. year units of output price per unit 1 3 3 2 4 4 3 6 5 4 7 7 5 8 8 Refer to the above data. The nominal GDP for year 4 is:
a) $49.
b) $55.
c) $40.
d) $35.
a) $49.
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In the Keynesian model, what are the effects (on output, the real interest rate, and the price level) of an adverse productivity (i.e., aggregate supply) shock?
What will be an ideal response?
Romolo is seeking elected office. In his district, he finds that most people are not strongly politically opinionated, but that very liberal people slightly outnumber very conservative people. What would be the best way for him to approach and win the election?
a. Run as a very conservative underdog. b. Run as a very liberal candidate. c. Run as a slightly liberal moderate. d. Run as a slightly conservative moderate.
A significant bank crisis in one Eurozone country is a problem for the ECB because:
A) it will violate its money supply growth rule if it tries to provide liquidity to that country's banks. B) it has no mandate to be a lender of last resort to financial institutions in the Eurozone. C) it has no ability to affect the money supply in Eurozone countries. D) its consensus decision-making process may prompt too rapid a reaction to a crisis in one country.
Under a fixed exchange rate system, if the inflation rate of the United States exceeds the inflation rate of other nations, the:
A. dollar will depreciate. B. dollar will not change. C. United States will develop a trade deficit. D. United States will develop a trade surplus.