Answer the question based on the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year.YearUnits of OutputPrice Per Unit18$22103315441855206If year 2 is the base year, the real GDP for year 3 is:
A. $45.
B. $60.
C. $40.
D. $30.
Answer: A
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If the price level in Great Britain increases from 102 to 105 (holding all else constant), real wealth ________ and there is a movement ________ along Great Britain's aggregate demand curve
A) decreases; upward B) increases; upward C) decreases; downward D) increases; downward
The producer of compliments may want to advertise them together
Indicate whether the statement is true or false
A lender need not be penalized by inflation if the
A. long-term rate of inflation is less than the short-term rate of inflation. B. short-term rate of inflation is less than the long-term rate of inflation. C. lender correctly anticipates inflation and increases the nominal interest rate accordingly. D. inflation is unanticipated by both borrower and lender.
Keith just got an iPhone 5 for his birthday, and he quickly switches his data over and throws his iPhone 4 in a drawer and forgets about it. Economists would say this behavior is ________ and would use the concept of ________ to explain this choice.
A. irrational; the implicit cost of ownership B. irrational; ignoring sunk costs C. rational; considering sunk costs D. rational; the implicit cost of ownership