In an economy experiencing a persistently falling price level:
A. potential GDP will necessarily exceed actual GDP.
B. changes in nominal GDP may either overstate or understate changes in real GDP.
C. changes in nominal GDP understate changes in real GDP.
D. changes in nominal GDP overstate changes in real GDP.
C. changes in nominal GDP understate changes in real GDP.
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The neoclassical growth theory is based on a subsistence real wage rate
Indicate whether the statement is true or false
If the production possibilities curve is a downward sloping straight line, then
A) resources are highly specialized, making it difficult to use them for alternative uses. B) technological change has increased. C) production is efficient only when producing at the mid-point. D) all resources must be perfectly adaptable for alternative uses.
The economic expansion that began in 1991
a. lasted approximately five years. b. lasted approximately twelve years. c. lasted approximately nine years. d. was the longest expansion in U.S. history. e. was the second longest expansion in U.S. history.
Stagflation refers to a period of staggering economic growth combined with very low inflation rates
Indicate whether the statement is true or false