Research on the effects of recessions on the real level of GDP shows that
A) recessions cause only temporary reductions in real GDP, which are offset by growth during the expansion phase.
B) recessions cause large, permanent reductions in the real level of GDP.
C) recessions cause both temporary and permanent declines in real GDP, but most of the decline is temporary.
D) recessions cause both temporary and permanent declines in real GDP, but most of the decline is permanent.
C
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Why does the substitution bias cause the consumer price index to overstate inflation and the cost of living? Why does the increase in quality bias cause the consumer price index to overstate inflation and the cost of living?
What will be an ideal response?
Refer to the Article Summary. Labor productivity in the UK was well below the productivity in five of the other G7 nations, only faring better than Japan.. Labor productivity is important for an economy because an increase in labor productivity
A) will increase output and decrease wages in the long run. B) will increase the labor force participation rate. C) will create short-run, but not long-run, economic growth. D) allows the average consumer to increase consumption.