Increased production, but not increased inflation, will result in higher:
A. nominal GDP.
B. money GDP.
C. real GDP.
D. current dollar GDP.
Answer: C
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If the Fed tries to lower the unemployment rate so it is lower than the natural unemployment rate, before the expected inflation rate changes, the inflation rate ________ and the unemployment rate ________
A) does not change; falls B) falls; falls C) rises; does not change D) falls; rises E) rises; falls
In a market with an external cost, government action
A) cannot decrease the amount of the deadweight loss from the external cost. B) can sometimes help to achieve an efficient outcome. C) cannot alter firms' cost curves. D) Both answers A and C are correct. E) Both answers B and C are correct.
Figure 4.3 illustrates the demand for tacos. A decrease in the demand for tacos is represented by the movement from
A) point a to point b. B) point c to point b. C) D2 to D1. D) D0 to D1.
A country will export wheat if, with no international trade, ______
A. it produces a surplus of wheat B. its opportunity cost of producing wheat is below the world price C. its domestic price of wheat exceeds the world price D. other countries have a shortage of wheat