Nominal GDP is measured by calculating real GDP at constant prices.
Answer the following statement true (T) or false (F)
False
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The ability of the federal government to regulate the distribution of income among families and individuals is
A) enormous, as shown by the redistribution that has occurred from the rich to the poor since World War II. B) largely limited to what can be accomplished through revisions in the rules of the game. C) unlimited because government is sovereign. D) virtually unlimited because few people would be willing to emigrate merely in order to escape taxation.
Starting from a position of macroeconomic equilibrium at the full-employment level of real GDP, in the short run an unanticipated increase in the money supply will
a. raise real interest rates, lower prices, and reduce real GDP. b. raise real interest rates, lower prices, and leave real GDP unchanged. c. raise nominal interest rates, lower prices, and leave real GDP unchanged. d. lower real interest rates, raise prices, and increase real GDP.
Suppose that a firm's long-run average total costs of producing custom wooden picnic tables is $300 when it produces 10,000 tables and $325 when it produces 11,000 tables. For this range of output, the firm is experiencing
a. economies of scale. b. constant returns to scale. c. diseconomies of scale. d. specialization.
Exhibit 11-1 Disposable income and consumption data Income (Y) Change inDisposable Income Consumption (C) 0 500 1,000 1,000 1,400 2,000 1,000 2,200 3,000 1,000 2,900 4,000 1,000 3,500 5,000 1,000 4,000 In Exhibit 11-1, when disposable income is increased from $2,000 to $3,000 to $4,000,
A. total consumption increases by $1,000. B. the marginal propensity to consume remains constant. C. the marginal propensity to consume decreases from 0.7 to 0.6. D. the marginal propensity to consume decreases from 0.8 to 0.7.