If nominal GDP of a country increased and real GDP remained unchanged in a particular year, which of the following is most likely to have taken place?
a. Output increased and the price level increased
b. Output increased and the price level decreased
c. Output remained constant and the price level increased
d. Output decreased and the price level decreased
e. Output increased and the price level remained constant
c
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According to this Application, the bias in the CPI would be ________ if new goods are ________ incorporated in CPI calculations
A) smaller; slowly B) smaller; quickly C) negligible; slowly D) greater; immediately
On an isoquant/isocost graph, the least cost input combination of producing a given output is
A) given by the tangency between the isoquant curve and the isocost line. B) any point on the isocost line. C) any point on the isoquant curve. D) one of the intercept values on the graph.
If the market price ever drops below a firm's average variable costs at its profit-maximizing level of output the:
A. loss-minimizing quantity of output is zero. B. firm is not earning enough revenue to cover the variable costs of production. C. firm should shut down immediately. D. All of these are true.
When marginal cost pricing is used, the losses are usually paid for by ______.
a. taxpayers b. producers c. distributors d. suppliers