Aggregation is the process of
A) calculating real GDP based on nominal GDP and the price index.
B) summing individual economic variables to obtain economywide totals.
C) forecasting the components of GDP.
D) predicting when recessions will occur.
B
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At higher rates of interest
A) businesses demand more investment because there are more funds available to invest. B) businesses demand more investment because future profitability is likely to be greater. C) households save more because they get a greater return on their savings. D) households save less because it is more expensive to save.
In the classical model, a temporary decrease in government spending would cause a decrease in
A) output, the real interest rate, real wages, and the price level. B) employment, the real interest rate, real wages, and the price level. C) output, employment, the real interest rate, and the price level. D) output, employment, real wages, and the price level.