Differentiate between nominal and real GDP
What will be an ideal response?
Nominal GDP is the actual measured GDP in terms of current year dollars or prices existing at the time the output was produced. Real GDP reflects the value of GDP after it has been corrected for price changes compared to the price level in a reference year (called the base year). A GDP price index is calculated each year to measure the level of prices relative to the level of prices in the base year. This price index is then expressed as a percentage of the base year price level.
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Expansionary fiscal policy consists of:
a. increased government purchases and increased taxes. b. decreased government purchases and decreased taxes. c. decreased government purchases and increased taxes. d. increased government purchases and decreased taxes.
Which statement is FALSE?
A. Technological change is the key to productivity growth. B. Productivity is output per unit of input. C. The only way to build up capital is to consume more and save more. D. In the 1950s, 1960s, and 1970s, Americans managed to save about 7-8% of disposable income.
A p-value refers to the probability of obtaining the result that you find in the sample data if the null hypothesis is not true.
Answer the following statement true (T) or false (F)