In the second quarter (three-month period) of 2016, U.S. nominal GDP increased but U.S. real GDP declined. What can we conclude?
A. Real wages declined by more than real GDP.
B. Nominal income declined by more than personal income.
C. The price level fell by more than real GDP.
D. The price level rose by more than nominal GDP.
Answer: D
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If a monopolist owns or controls a key resource necessary for production, it is a source of:
A) legal market power. B) natural market power. C) regulated market power. D) restricted market power.
The existence of any consumer surplus in the market suggests that all of the following practices are possible in the market except which one?
A) third-degree price discrimination B) first-degree price discrimination C) second-degree price discrimination D) a single price is charged to all consumers
In a competitive market the current price is $5 . The typical firm in the market has ATC = $5.00 and AVC = $4.50
a. In the short run firms will shut down, and in the long run firms will leave the market. b. In the short run firms will continue to operate, but in the long run firms will leave the market. c. New firms will likely enter this market to capture any remaining economic profits. d. The firm will earn zero profits in both the short run and long run.
A major difference between monopolistic competition and perfect competition is
A) the number of sellers in the markets. B) the degree by which the market demand curves slope downwards. C) that products are not standardized in monopolistic competition unlike in perfect competition. D) the barriers to entry in the two markets.