How does real gross domestic product (GDP) differ from nominal GDP?
A. Nominal GDP controls for price changes, while real GDP does not.
B. Real GDP controls for price changes, while nominal GDP does not.
C. Nominal GDP can be used to directly compare the amount of output produced from year to year, while real GDP cannot be used for such comparison.
D. There is no difference between nominal GDP and real GDP.
Answer: B
Economics
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Suppose in the money market the equilibrium nominal interest rate is 5 percent. If the Fed increases the quantity of money, what is the effect on the nominal interest rate?
What will be an ideal response?
Economics
For purposes of monetary policy, the Federal Reserve has targeted the interest rate known as the
A) prime rate. B) Treasury bill rate. C) federal funds rate. D) discount rate.
Economics