Assume that in year 1 an economy produces 1000 units of output and they sell for $100 a unit, on average. In year 2, the economy produces the same 1000 units of output, and sells it for $110 a unit, on average. Use year 1 prices to calculate real GDP
in Year 1 and Year 2. What happened to real GDP between years 1 and 2? Why?
What will be an ideal response?
The real GDP in year 1 (quantities in year 1 times prices in year 1) is equal to $100,000. The real GDP in year 2 is calculated by multiplying the output produced in this specific year times the prices at which the products sold on average in year 1. The real GDP in year 2 is also equal to $100,000. Although prices increased from $100 in year 1 to $110 in year 2, the total amount of output produced did not change and real GDP should be equal for these two years.
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The United States experienced _______________ from 1930 to 1933.
A. stagflation B. inflation C. deflation D. budget surpluses
A cartel is a group of firms that attempts to
A) maximize joint revenue. B) maximize joint profit. C) behave independently. D) increase consumer surplus.
Social Security, officially known as Old Age and Survivors Insurance (OASI),
a. collects funds from current workers and invests them in order to provide these workers with a stream of income during the retirement phase of life. b. is based on the same principles as private insurance programs. c. is an intergenerational income transfer program. d. is a voluntary savings program run by the government.
The relevant market argument was used successfully by
A. Alcoa. B. DuPont. C. both Alcoa and DuPont. D. neither Alcoa nor DuPont.