Suppose that the nominal value of GDP increased by approximately 2 percent during a given year, but real GDP decreased by 3 percent. Which of the following best explains these events?
a. The money supply decreased by approximately 5 percent.
b. Prices fell by approximately 5 percent.
c. Prices increased by approximately 5 percent.
d. The real productive capacity of the economy increased by approximately 5 percent.
C
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Cooperative efforts to establish a regional free trade area in the Asian-Pacific corridor have been hampered by perceived security threats posed by China and Japan as well as
a. fears of fragmenting the global trading system. b. existing relationships with the U.S. as a trading partner. c. the current Trans Pacific Partnership. d. the wide range of forms of government.
Suppose the market price is $5, marginal cost is $4, and average total cost is $2. The perfectly competitive firm in that market is
A) earning $3 in economic profits per unit of output and is not maximizing profits. B) earning $2 in economic profits per unit of output and is maximizing profits. C) earning $1 in economic profits per unit of output and is not maximizing profits. D) none of the above: Insufficient information is given.