If prices in the current year are higher on average than in the base year, real GDP in the current year ________ nominal GDP in the current year.
A. could be greater than or less than
B. is less than
C. is equal to
D. is greater than
Answer: B
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One way to avoid counting the prices of intermediate goods multiple times in computing the value of GDP is to:
A. sum the value added of only producers of final goods and services. B. sum the value added of producers of both intermediate and final goods and services. C. sum the value added of only producers of intermediate goods and services. D. subtract the value added of producers of intermediate goods and services from the value added of producers of final goods and services.
In the short run, if the economy is at full employment, then the quantity of real GDP
A) is equal to potential GDP, and the unemployment rate is equal to the natural unemployment rate. B) does not necessarily equal potential GDP, but the unemployment rate is equal to the natural unemployment rate. C) is equal to potential GDP, but the unemployment rate does not necessarily equal the natural unemployment rate. D) is equal to potential GDP, but the unemployment rate is less than the natural unemployment rate. E) exceeds potential GDP, and the unemployment rate is less than the natural unemployment rate.
Refer to the figure above. Calculate the total surplus after the government imposes a tariff of $1 per unit
A) $160 B) $240 C) $300 D) $315
Economic theory assumes that a firm's goal is to:
A. maximize its accounting profit. B. earn an economic profit. C. earn an accounting profit. D. maximize its economic profit.