Why is it important to use real GDP rather than nominal GDP figures when making comparisons of output across time periods?
a. The real GDP figures are a better measure of changes in the general level of prices.
b. The real figures will reflect changes in the quantity of output and not changes in the general level of prices.
c. The real figures will reflect changes in the general level of prices as well as changes in the quantity of output.
d. The real GDP figures adjust for changes in the level of employment.
b
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When policy makers are deciding where to place the statutory incidence of a tax, it is helpful to remember that:
A. it will have no effect on the economic incidence of the tax. B. the economic incidence will fall to the more-elastic party. C. it will largely determine the economic incidence of the tax. D. it will have a large impact on efficiency of the tax.
The growth rate of potential GDP is the sum of two other growth rates. These other growth rates are
a. population and resource base. b. goods output and services output. c. labor input and labor hours worked. d. labor input and labor productivity.
The line segment ST describes the region where
A. increases in output do not cause higher prices because of a large portion of unemployed resources.
B. prices and output increase together.
C. increases in prices do not generate any increase in output.
D. increases in prices cause decreases in output.
What is the difference between between total costs, variable costs, and fixed costs?
What will be an ideal response?