Deflation refers to a situation in which
A. the inflation rate decreases.
B. there is a recession and inflation.
C. prices are not changing.
D. the average of all prices is falling.
Answer: D
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If marginal benefit is greater than marginal cost, output is inefficiently high
Indicate whether the statement is true or false
Suppose we know the following about a lawn repair business: wages $15,000, profits $4,000, tax $ 3,000, parts $ 9,000. What is the contribution to GDP of this business using the product approach?
A) $31,000. B) $27,000. C) $26,000. D) $22,000.
The slope of the short-run aggregate supply curve depends on how sharply: a. the marginal cost of production rises as real GDP expands. b. the average cost of production rises as real GDP expands. c. real GDP increases as the price level rises
d. nominal GDP increases as the price level rises. e. product prices change as the price level rises.
Discuss the problems with GDP as a measure of a country's current production and income