Suppose a small economy produces only MP3 players. In year 1, 10,000 MP3 players are produce and sold at a price of $100 each. In year 2, 12,000 MP3 players are produced and sold at a price of $80 each. Which of the following statements is true?
A.
Real GDP and nominal GDP both increase
B.
Real GDP increases while nominal GDP remains constant
C.
Real GDP decreases while nominal GDP increases
D.
Real GDP increases while nominal GDP decreases
D.
Real GDP increases while nominal GDP decreases
You might also like to view...
One method for solving the adverse selection problem is
A) to restrict the ability of the party with information from taking advantage of hidden information. B) by having the government run all firms. C) to close down firms with bad reputations. D) All of the above.
John Maynard Keynes attributed the "stickiness" of real wages in the early years of the depression to ______. a. the fall in the money supply. b. the tendency of people to cut wages slowly while looking for a job. c. the tendency of employers to ruthlessly replace long-time employees with theunemployed
d. resistance by workers, especially unionized workers, to wage cuts.
An oligopoly model that describes formal collusion is the
a. kinked demand curve model b. cartel model c. cost-plus pricing model d. game theory model e. horizontal merger model
The M1 definition of the money supply includes currency,
a. checkable deposits, and savings accounts. b. checkable deposits, and credit cards. c. checkable deposits, and debit cards. d. and checkable deposits.