Why is it important to use real GDP rather than nominal GDP figures when making comparisons of output across time periods?
A. The real GDP figures are a better measure of changes in the general level of prices.
B. The real figures will reflect changes in the quantity of output and not changes in the general level of prices.
C. The real figures will reflect changes in the general level of prices as well as changes in the quantity of output.
D. The real GDP figures adjust for changes in the level of employment.
Answer: B
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Macroeconomics is best defined by which of the following statements?
A) Macroeconomics is the study of how firms attempt to maximize profits. B) Macroeconomics is the study of the behavior of the economy as a whole. C) Macroeconomics is the study of individual households. D) Macroeconomics is the study of how the prices of individual goods are determined.
On December 29th, the cost of a skiing trip to Finse, Norway, was 6,500 krone. Two weeks later, the American dollar appreciated against the Norwegian krone. If the price of the trip in Norway remains the same, _____
a. an American skier living in Florida will now view this trip as cheaper compared to before b. an American skier living in Florida will now view this trip as highly expensive compared to before c. an American skier living in Florida will now view this trip as of the same value as before d. an American skier living in Florida will now value this trip less as compared to before e. an American skier living in Florida will no longer take this trip
One conceptual problem in assigning assets to M1, M2, etc. is
a. distinguishing money from "near monies." b. the problem of measuring asset size. c. the need to agree on a unit of account. d. the different size of financial assets.
Higher interest rates as a result of deficit spending:
A. increase the wealth of future generations. B. crowd out private investment. C. ultimately has a positive impact on productivity gains and? society's standard of living. D. raise growth in investment spending.