Which of the following increases as a result of an increase in real GDP?
i. autonomous expenditure
ii. induced expenditure
iii. potential GDP
A) i only B) ii only C) iii only D) ii and iii E) i, ii, and iii
B
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Which of the following statements is true of the short run?
A) Identical firms can enjoy positive economic profits. B) Identical firms face a downward-sloping supply curve. C) Non-identical firms face a downward-sloping supply curve. D) Non-identical firms cannot enjoy positive economic profits.
If national income accountants fail to make an adequate adjustment for increases in the quality of goods and services over time,
a. increases in real GDP will understate the growth rate of real output. b. increases in real GDP will overstate the growth rate of real output. c. the GDP deflator will overstate the rate of inflation. d. the GDP deflator will understate the rate of inflation. e. both a and c are correct.