Prior to 1996 the government measured real GDP using 1987 prices. What would the rapid growth in computers and the fall in computer prices tend to do to the difference between true GDP growth and measured real GDP growth, relative to using a later year?
What will be an ideal response?
Using 1987 prices would tend to overstate GDP growth relative to using prices from a later year. Computers were a burgeoning part of national product in the late 1980s and early 1990s, and the incremental contribution to GDP looks bigger when using a bigger price rather than a smaller price.
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Refer to Figure 5-3. With insurance and a third-party payer system, what is the amount of the deadweight loss?
A) $0 B) $2,500 C) $5,000 D) $24,000
Because cooperation dominates noncooperation as a strategy for maximizing profits, cheating is rarely if ever an issue that cartels have to contend with
Indicate whether the statement is true or false
Which of the following is most likely produced in a monopolistically competitive market?
a. soybeans b. autos c. fast food d. oil e. local phone service
The greater the differentiation among the products of monopolistically competitive firms, the lesser is the price-elasticity of demand
a. True b. False Indicate whether the statement is true or false