Distinguish between real and nominal GDP. Which one is a better measure of the business cycle?
What will be an ideal response?
Nominal GDP is the value of currently produced final goods and services measured in current year prices. Real GDP is the value of currently produced final goods and services measured in constant year prices. Nominal GDP can change based on both changes in the price level and the quantities of goods and services produced whereas real GDP only changes in response to changes in the quantities of goods and services produced. Real GDP is a better measure of the business cycle.
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In trying to determine the "true cost" of some debated proposal,
A) actions have no true cost, only benefits. B) actions will entail different costs for different people. C) the costs of actions must ultimately be the same for everyone. D) there is no difference between costs and benefits.
_____occurs when the burden of a tax statutorily placed on one party is borne by another party
a. Tax shifting b. Tax evasion c. Tax avoidance d. Tax amnesty