Answer the following questions true (T) or false (F)
1. If prices rise on average in the U.S. economy, the purchasing power of a dollar declines.
2. Using "chain-weighted" prices to calculate real GDP remedies the distortions causes by changes in relative prices over time.
3. If the GDP deflator is equal to 100, then for that year nominal GDP is equal to real GDP.
1. TRUE
2. TRUE
3. TRUE
You might also like to view...
In present value, if 140 delayed utils are only worth 70 utils now, the discount weight must be equal to ________
A) 1/2 B) 1/8 C) 1 D) 2
GDP is the most closely watched economic statistic because it is thought to be the best single measure of a society's economic well-being
a. True b. False Indicate whether the statement is true or false
People respond to incentives
A) by ignoring negative incentives and responding to positive incentives only. B) only when they are irrational. C) as they never intentionally make decisions that would leave them worse off. D) when they have low incomes.
A difficulty faced by policymakers who wish to use the unemployment rate as a guide to whether the economy is weak or strong is that
A) the natural rate of unemployment is hard to measure. B) the natural rate of unemployment almost never changes. C) policymakers must use data on output to tell whether the unemployment rate is too high or too low. D) the impact of policy on the economy is subject to long and variable lags.