Since real GDP is adjusted for inflation and nominal GDP is not, nominal GDP must always be higher than real GDP. Do you agree or disagree? Why?
What will be an ideal response?
Disagree. It depends on whether the year being examined is before or after the base year. If after the base year, then nominal GDP will always exceed real GDP if inflation has occurred. If before the base year, then nominal GDP will always be less than real GDP if inflation has occurred. If the year being examined is before the base year and inflation has occurred, then the base year prices will exceed the prices of that year.
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Restrictions on free international trade designed to protect domestic industries from competitive market forces that originate beyond the borders of the country are:
A) competitive policies. B) protectionist policies. C) free trade policies. D) antitrust policies.
Holding everything else constant, if total factor productivity increases, the debt-to-GDP ratio will ________, and if the labor force growth rate increases, the debt-to-GDP ratio will ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease