Why is it important to use real GDP rather than nominal GDP figures when making comparisons of output across time periods?
A. The real GDP figures are a better measure of changes in the general level of prices.
B. The real figures will reflect changes in the quantity of output and not changes in the general level of prices.
C. The real figures will reflect changes in the general level of prices as well as changes in the quantity of output.
D. The real GDP figures adjust for changes in the level of employment.
Answer: B
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A decrease in the rental rate of capital can lead to a long run increase or decrease in the number of firms in the industry.
Answer the following statement true (T) or false (F)
In the above table, the working age population is
A) 225 million. B) 100 million. C) 140 million. D) 155 million.
You're called in as a consultant: Price is $24 . At a production level of 200 units, MC = MR, AFC = $6, and AVC = $25 . What do you advise this firm to do?
a. Increase output. b. Decrease output. c. Shut down operations. d. Stay at the current output; the firm is earning a profit of $1,400. e. Stay at the current output; the firm is losing $1,400.
Data on the relationship between the percentage of the workforce unionized and the share of national income allocated to labor suggest that unionization has
a. greatly altered the labor-capital distribution of national income. b. increased the share of national income allocated to labor. c. had a positive effect on the wages of nonunion workers. d. had no significant impact on the share of income going to labor.