Why is it important to use real GDP rather than nominal GDP figures when making comparisons of output across time periods?
A. The real GDP figures are a better measure of changes in the general level of prices.
B. The real figures will reflect changes in the quantity of output and not changes in the general level of prices.
C. The real figures will reflect changes in the general level of prices as well as changes in the quantity of output.
D. The real GDP figures adjust for changes in the level of employment.
Answer: B
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Refer to Table 4-3. The table above lists the marginal cost of polo shirts by Marko's, a firm that specializes in producing men's clothing. If the market price of Marko's polo shirts is $13, Marko's will produce
A) 1 shirt. B) 2 shirts. C) 3 shirts. D) 4 shirts.
Which of the following does NOT represent a possible shape of the long-run average cost curve?
A) downward sloping B) upward sloping C) U-shaped D) vertical