Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?
A. No, since prices are held constant and that would be mathematically impossible.
B. Yes, it would indicate a larger rise in prices relative to a decrease in output.
C. No, since output is held constant and that would be mathematically impossible.
D. Yes, it would indicate a larger rise in output relative to a decrease in prices.
Answer: B
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Suppose the marginal propensity to consume in an economy is 0.9. What would be the Keynesian multiplier in this economy?
Select one: a. 0.1 b. 2 c. 5 d. 10
Which statement about market power is incorrect?
A. It can lead to price increases that exploit consumers. B. It can lead to resource misallocation. C. It can lead to inefficient production and the lack of innovation. D. Monopoly power can lead to decreases in producer surplus.
Which of the following will shift the supply curve of good X rightward?
a) the price of Y, a substitute in production for good X, rises b) an increase in the cost of capital used to produce good X c) an increase in the price of energy d) a decrease in the number of suppliers of good X e) a decrease in the wages of workers employed to produce good X
Suppose someone told you that the chain-weighted price index for GDP in a country was 135. Why does this fact not convey much information to you?
What will be an ideal response?