The formula for nominal GDP is
a. Nominal GDP = Real GDP + GDP Deflator.
b. Nominal GDP = Real GDP – GDP Deflator.
c. Nominal GDP = GDP Deflator / Real GDP.
d. Nominal GDP = GDP Deflator x Real GDP.
d. Nominal GDP = GDP Deflator x Real GDP.
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Which of the following best illustrates the circular flow model in action?
A. Bobbie goes to work and builds cars, and uses the income she receives to buy food at the grocery store. B. Evan buys a new couch; the owner of the furniture store uses some of the money from the sale to pay her supplier, and uses the rest to take her family out to dinner. C. Boeing experiences a surge in orders for new airplanes, prompting the company to hire more workers. D. All of these answers illustrate the workings of the circular flow model.
Suppose, for whatever reason, the trade deficit of the United States with Europe is projected to fall and that before this happens the exchange rate between the euro and the dollar is .75 euros/dollar. The resulting exchange rate would likely
A. fall to (perhaps) .6 euros/dollar. B. rise to (perhaps) .9 euros/dollar. C. cause the exchange rate to have to be expressed in dollars per euro (because the other way would no longer make sense). D. remain unchanged.
Which of the following examples would most likely be subject to selection bias?
A. 750 National Rifle Association members are questioned to obtain the public's opinion about pending federal legislation regarding stricter gun control laws. B. 500 University of Wisconsin students are polled on their opinion about a possible tuition hike at their school. C. 60 members of a 100-member neighborhood homeowners' association vote to approve funding for private security patrols in their neighborhood. D. 1,000 registered voters in Nashville are called and asked who they are planning to vote for in the upcoming Nashville mayoral election.
Refer to the figure and assume the economy initially is in equilibrium at point a. In the new classical theory, an unanticipated decrease in aggregate demand from AD 2 to AD 3 would move the economy:
A. directly from a to h.
B. from a to g to h.
C. directly from a to d.
D. from a to c to h.