If real GDP has increased, which of the following statements is always true?
A) Nominal GDP has increased.
B) Output has increased.
C) Prices have remained the same.
D) Output might have decreased if prices have risen enough.
B
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A rise in the multifactor productivity index means that at each (K/N) we have (Y/N) ________, which shifts the (S/N) curve ________, resulting in a movement of the steady-state intersection to the ________
A) rising, downward, left B) rising, upward, right C) rising, downward, right D) falling, upward, left E) falling, downward, left
The inflation rate has been constant for several years at 4 percent, and the unemployment rate has been stable at 6 percent over the same time period. Changes in government policy that cause the inflation rate to rise to 6 percent will
A) have no effect on the unemployment rate. B) cause the unemployment rate to fall in the short run. C) cause the unemployment rate to rise to 9 percent in the short run. D) cause the unemployment rate to rise in the short run, but we cannot tell by how much.