If over a period of time real gross domestic product (GDP) increases while nominal GDP decreases, then this implies
a. a significant rise in the price level.
b. a significant drop in the price level.
c. that real GDP is higher than nominal GDP.
d. that the given period occurs before the base period.
e. that the given period year occurs after the base period.
Answer: b. a significant drop in the price level.
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A firm currently employs four workers in a sandwich shop, and produces sandwiches at a total cost per sandwich (ATC) of $3. The sandwiches sell for $5. If the marginal cost of hiring another worker to produce sandwiches is $5.50 per sandwich, then:
A. it will cost $5.50 to make another sandwich, which can only be sold for $5. B. the firm will lose $0.50 per sandwich if it hires another worker. C. the firm should not hire a fifth worker. D. All of these are true.
Katya owns a math-tutoring business. Her accountant most likely includes which of the following costs on her financial statements? (i) workbooks containing practice problems (ii) rent for the storefront (iii) wages Katya could earn as a bookkeeper (iv) interest that Katya's money was earning before she spent her savings to set up the tutoring business
a. (i) only b. (i) and (ii) only c. (iii) and (iv) only d. (i), (ii), (iii), and (iv)
The ________ part of a perfectly competitive firm's marginal cost curve that is equal to or above points on its average variable cost curve is the firm's short-run supply curve.
A. backward bending B. horizontal C. declining D. rising
If the world supply of diamonds increases, the market price of diamonds decreases, and the consumer surplus derived by diamond consumers increases
a. True b. False Indicate whether the statement is true or false