According to the hypothetical economy in Figure 5.1, between 1960 and 1970 real GDP declined but nominal GDP continued to rise. The increase in nominal GDP was due to
A. An increase in the standard of living.
B. A decrease in the price level.
C. An increase in the quantity of output produced.
D. An increase in the price level greater than the decrease in output, causing the nominal dollar value of output produced to increase.
Answer: D
Economics
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A predominant view among Federal Reserve officials is that
A) the Phillips curve is unimportant. B) the Phillips curve helps us forecast inflation. C) the Phillips curve helps us forecast the nominal interest rate. D) the Phillips curve does not exist in the data.
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