In an economy with persistent inflation,
A. real GDP will grow faster than nominal GDP.
B. nominal GDP will grow faster than real GDP.
C. nominal and real GDP will grow at the same rate.
D. nominal and real GDP will both fall.
Answer: B
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The above figure shows Jane's budget line and two of her indifference curves. When Jane is consuming at her best affordable point, what is her marginal rate of substitution?
A) 2.0 lobster dinners per steak dinner B) 1.0 lobster dinners per steak dinner C) 0.5 lobster dinners per steak dinner D) 0.33 lobster dinners per steak dinner
According to Gordon which of the following statements about Friedman's fooling model is accurate?
A) The demand for labor depends on the nominal wage. B) As prices increase, firms will offer higher real wages; these higher wages will bring forth an increase in the supply curve of labor. C) The supply curve of labor depends on the expected real wage. D) All of the above statements are accurate.
Profitability in cotton farming depended on which of the following factors?
(a) Physical crop yields (b) World and domestic cotton prices (c) Subsistence farming during periods of low cotton prices (d) All of the above
Which of the following will most likely happen when better technology is used in production?
A) an upward movement along the production possibilities curve B) an outward shift of the production possibilities curve C) an inward shift of the production possibilities curve D) a downward movement along the production possibilities curve