The value of real GDP in the current year equals
A) the value of current-year output in prices of the base year.
B) the value of current-year output in prices of the current year.
C) the value of base-year output in prices of the base year.
D) the value of base-year output in prices of the current year.
A
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Which of the following is an example of a fiscal policy?
a. Raising the discount rate b. Reducing the reserve requirement c. Reducing government spending d. Pegging the currency
Refer to the diagram and assume that prices and wages are flexible both upward and downward in the economy. In the extended AD-AS model:
A. demand-pull inflation would involve a rightward shift of curve A, followed by a rightward
shift of curve C.
B. cost-push inflation would involve first a leftward shift of curve C, then a rightward shift of curve C.
C. recession would involve a leftward shift of curve A, followed by a leftward shift of curve C.
D. recession would involve a rightward shift of curve D, followed by leftward shifts of curves A
and C.