Of the following, which is CORRECT?
A) Nominal GDP does not change when the production of goods and services increases.
B) Nominal GDP is not affected by changes in prices of goods and services.
C) Nominal GDP increases when the prices of goods and services increase.
D) Real GDP changes only when the prices of goods and services really change.
C
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Wages in excess of their equilibrium level help explain
a. frictional but not structural unemployment. b. structural but not frictional unemployment. c. both frictional and structural unemployment. d. neither frictional nor structural unemployment.
When we compare PAE and actual output (Y) if PAE is greater than Y we expect that:
A. eventually production will decrease. B. eventually production will increase. C. the government will intervene by cutting down on taxes. D. there will be no change in aggregate production.