Even though it is not a perfect measure, economists can use real GDP to
i. compare how the value of the goods and services produced in China
have changed over the past 10 years.
ii. look at the length of recessions and expansions in the United States.
iii. compare the standard of living in China versus the standard of living in Vietnam.
A) ii only
B) i, ii and iii
C) i and iii
D) i and ii
E) ii and iii
B
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Your roommate argues that he can think of no better situation than living in a deflationary economy, as prices of goods and services would continuously fall. You disagree and argue that during a deflation, people can be made worse off because
A) the value of the real interest rate will drop below the nominal interest rate. B) borrowers will have to pay increasing amounts in real terms over time. C) the purchasing power of people's incomes would increase. D) the purchasing power of the currency would decrease.
The total benefits to society from pollution abatement
A) increase at an increasing rate with the increase of pollution abatement. B) increase at a decreasing rate with the increase of pollution abatement. C) decrease at an increasing rate with the increase of pollution abatement. D) decrease at a decreasing rate with the increase of pollution abatement.