The use of purchasing power parity prices
A) decreases the real GDP per person statistics published by the International Monetary Fund.
B) weakens the validity of cross country comparisons of economic welfare.
C) increases the amount by which U.S. GDP is larger than that of any other nation.
D) accounts for differences in the prices of the same goods in different countries when measuring real GDP.
D
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Which of the following is not a basis for trade between two nations?
a. different skill levels of the labor forces b. one nation's absolute advantage c. a difference in tastes between countries d. economies of scale e. different capital stocks
If a firm shuts down in the short run,
a. it exits the industry b. losses would equal its variable costs c. losses would equal its fixed costs d. profits would be zero e. losses would equal to zero
Given a $500 billion AD shortfall and an MPC of 0.75, the desired fiscal stimulus would be
A. A $2 trillion increase in government expenditures. B. A $375 billion increase in government expenditures. C. A $125 billion increase in government expenditures. D. A $500 billion increase in government expenditures.
Answer the following questions true (T) or false (F)
1. The nominal interest rate plus the inflation rate equals the real interest rate. 2. If inflation expectations are increasing, we would expect that the nominal interest rate would also be increasing, holding all else constant. 3. The nominal interest rate minus the inflation rate equals the real interest rate.