Of the following, which is CORRECT?
A) Nominal GDP does not change when the production of goods and services increases.
B) Nominal GDP is not affected by changes in prices of goods and services.
C) Nominal GDP increases when the prices of goods and services increase.
D) Real GDP changes only when the prices of goods and services really change.
C
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Suppose potential GDP is $100 billion and the natural unemployment rate is 5 percent. If the unemployment rate is 6 percent, then according to Okun's Law real GDP is
A) $102 billion. B) $98 billion. C) $101 billion. D) $99 billion. E) $100 billion.
Graphically, economic growth is represented as
A) a movement along the production possibilities curve. B) a movement from a point inside the production possibilities curve to a point on the curve itself. C) an inward shift of the production possibilities curve. D) an outward shift of the production possibilities curve.
Keynesians:
a. accept the countercyclical policy of doing nothing, that is, allowing market forces to work. b. believe that the level of aggregate demand in the 1930s was sufficient to generate full employment. c. accept the fact that policymakers should eliminate inflation first before focusing on unemployment. d. focus on increasing aggregate demand in order to stimulate the economy. e. were prepared for the events that beset our economy in the 1970s and 1980s.
The cost of producing an additional unit of a good is not the same as the average cost of the good
a. True b. False Indicate whether the statement is true or false