The drawback to calculating real GDP using base-year prices is that
A) real GDP in one year is not comparable to real GDP in another year.
B) relative prices change over time and these are not reflected in base-year prices, and this distorts GDP.
C) relative prices change over time and these changes are reflected in base-year prices.
D) quality changes are reflected in base-year prices.
Answer: B
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The amount single retirees receive in a monthly check if they retire at their retirement age is
A. their PIA. B. their AIME. C. constant throughout their lifetime. D. the most the retiree can receive in interest without having part of their benefit reduced.
In Zimbabwe, inflation rose from an annual rate of 32 percent in 1998 to 100,000 percent in early 2009. Considering only the effects of this unexpected inflation, which of the following groups are helped by the inflation:
A. No one; inflation hurts everyone B. People living on fixed pensions C. Debtors D. Unemployed people
Table 14.3Table 14.3 represents 3 markets for used stereos. Which of the markets in Table 14.3 are not in equilibrium?
A. 1 only B. 2 only C. 3 only D. 1, 2, and 3
Some economists believe that creeping inflation cannot be accepted because a gradual increase in prices leads to an ever-rising rate of inflation. Other economists argue that in order to achieve economic growth, some moderate price increases are necessary. Contrast and evaluate these two points of view.
What will be an ideal response?