If the GDP deflator is less than 100, which will be higher: nominal GDP or real GDP? Why?
What will be an ideal response?
Real GDP will be higher. The GDP deflator is the ratio of nominal GDP to real GDP, so if the value is less than 100, nominal GDP must be smaller than real GDP.
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A) a contraction. B) an expansion. C) a trough. D) a turning point.
Suppose a consumer is willing to pay $20 for one good X, $10 for a second, and $5 for a third, and the market price is $4 . The consumer surplus is:
a. $16 b. $6. c. $1 d. $23.
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a. True b. False Indicate whether the statement is true or false
Using purchasing power parity instead of exchange rates to calculate output will most likely:
A. lower the relative value of output in developing countries. B. show that prices in developing countries are higher than prices in developed countries. C. leave the relative value of output in developing countries unchanged. D. increase the relative value of output in developing countries.