Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next?
What will be an ideal response?
Nominal GDP can change because of either quantity changes or price changes. When there is inflation, nominal GDP overstates the increase in total production.
Economics
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Tradionally, it was pretty hard to get a mortgage
What will be an ideal response?
Economics
In a small open economy, an increase in government spending, while taxes remain the same, will be accompanied by
A) a decrease in private investment and an increase in privates saving. B) an increase in private investment and a decrease in private savings. C) a decrease in national savings and an increase in foreign borrowing. D) an increase in national savings and a decrease in foreign borrowing.
Economics