If prices in the current year are higher on average than in the base year, real GDP in the current year ________ nominal GDP in the current year.
A. is equal to
B. could be greater than or less than
C. is greater than
D. is less than
Answer: D
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Refer to the graph above. Assume that the economy is in a recession with a price level of P 1 and output level Q 1. The government then adopts an appropriate discretionary fiscal policy. What will be the most likely new equilibrium price level and output?
P1 and Q1 P1 and Q3 P2 and Q2 P2 and Q4
Which of the following will increase the level of human capital in an economy?
A. A decrease in the population. B. An increase in land mass. C. An increase in literacy rates. D. An increase in factory capacity.
Market power can cause market failure if it results in a misallocation of resources.
Answer the following statement true (T) or false (F)
Refer to the information provided in Table 30.1 below to answer the question(s) that follow.
Table 30.1
Refer to Table 30.1. What is the real wage rate in 2016 using 2015 as the base year?
A. $9.28 B. $9.58 C. $17.64 D. $19.00