Which of the following could cause nominal GDP to increase, but real GDP to decrease?
A) The price level falls and the quantity of final goods and services produced falls.
B) The price level falls and the quantity of final goods and services produced rises.
C) The price level rises and the quantity of final goods and services produced falls.
D) The price level rises and the quantity of final goods and services produced rises.
C
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In long-run macroeconomic equilibrium
A) real GDP equals potential GDP. B) the price level is fixed and aggregate demand determines real GDP. C) real GDP and the price level are determined by short-run aggregate supply and aggregate demand and long-run aggregate supply is irrelevant. D) real GDP is less than potential GDP.
A concert-goer who had been willing to pay up to $150 for a ticket, but who pays a scalper $125 for one, experiences a consumer surplus of $25
Indicate whether the statement is true or false
Knowing the value of the cross elasticity of demand allows us to distinguish between inferior goods and normal goods.
Answer the following statement true (T) or false (F)
A temporary decrease in the price of oil would be considered a:
A. long-run supply shock. B. demand shock. C. short-run supply shock. D. The changing price of oil would not affect any of these.