Real GDP rises faster than Nominal GDP.

QUESTION 1

  1. If both prices and production are rising throughout the economy, then:
    A. Real GDP rises faster than Nominal GDP.
    B. Real GDP rises slower than Nominal GDP.
    C. Real GDP rises at the same rate as Nominal GDP.
    D. Real GDP falls at a slower rate than Nominal GDP.

1 points

QUESTION 2

  1. The CPI underestimates the inflation rate because:
    A. it excludes imported goods.
    B. it is derived by dividing NDGP by RGDP.
    C. it is subject to a substitution bias.
    D. it fails to consider the consumption patterns of the typical metropolitan consumer.

1 points

QUESTION 3

  1. If inflation changed from 5% to 4%:
    A. the economy would be experiencing falling prices.
    B. the economy would be experiencing rising prices.
    C. the economy would be experiencing deflation.
    D. the economy would be experiencing stagflation.

1 points

QUESTION 4

  1. The AD curve is downwards sloping because of:
    A. the income and substitution effects.
    B. the increase in real income that arises when price falls.
    C. the real balance effect, the intertemporal substitution effect and the international substitution effect.
    D. the positive consequences of deflation for debt holders.

 

In: Economics

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