If a fixed money growth rate of 4 percent per year is followed and the growth rate of the natural level of real GDP is 4 percent per year, the average rate of inflation is:
a. 8 percent
b. 4 percent.
c. zero.
d. 1-2 percent.
c
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List five shortcomings of GDP which result in GDP not accurately measuring a country's well being
What will be an ideal response?
When the labor market is at full employment
A) real GDP equals potential GDP. B) the price level is stable. C) the price level equals the potential price level. D) the short run aggregate supply curve is horizontal.
A company that retains a high bond rating during a recession in which many other companies see their bond ratings cut will experience
A) an increased flow of funds into the market for its securities. B) an increased demand for its securities, resulting in a higher expected return. C) a decreased demand for its securities, resulting in a lower expected return. D) a decreased flow of funds into the market for its securities.
Which of the following statements is false?
A) Real GDP in the United States was approximately seven times greater in 2012 than in 1950. B) The U.S. population was approximately twice as large in 2012 than in 1950. C) Nominal GDP in the United States was approximately seven times greater in 2012 than in 1950. D) Real GDP is GDP adjusted for price changes.