A constant rate of U.S. economic growth over a given period of years would involve
A) adding the same amount of real dollars to real GDP per capita each year.
B) compounding the percentage increase in real GDP per capita over the years.
C) adding the same amount of nominal dollars to real GDP per capita each year.
D) None of the above are correct.
B
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The era of Prohibition began in 1920 when the Volstead Act was passed to implement the Eighteenth Amendment to the Constitution, which prohibited the production and sale of liquor and beer. In 1920 much of this activity went underground, and Al Capone became a leading illegal entrepreneur. Assuming the amount of liquor and beer produced stayed the same, what was the effect of the Volstead Act on
the GDP in 1920? a. GDP would have declined, since activities in the underground economy are not included. b. GDP would have remained the same, since only the organization producing the goods changed. c. GDP would have increased, because production in the underground economy increased. d. Real GDP would have increased, while nominal GDP would have decreased.
Imperfect knowledge about hazardous effects of a product will likely result in
A. insufficient resources devoted to producing a product. B. consumers paying too high a price for a product. C. underconsumption of a product. D. the formation of trusts among firms.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected. B. only the long-run aggregate supply curve would shift left. C. only the short-run aggregate supply curve would shift left. D. the long-run and short-run aggregate supply curves would both shift left.
Refer to Figure 14.2. A movement from point b to point d could be caused by a(n):
A. decrease in government spending. B. increase in the price of oil. C. decrease in taxes. D. increase in short-run aggregate supply.