In the graph shown, a shift in the AD curve to the right:
A. causes goods inflation.
B. lowers globally constrained potential output.
C. raises domestic consumption.
D. lowers domestic consumption.
Answer: C
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The basic difference between the expenditure and income approaches to measuring GDP can be illustrated by transactions in the product and resource markets of the circular flow diagram
Indicate whether the statement is true or false
Why is it important to use real rather than nominal GDP figures when making comparisons of output across time periods?
a. The real GDP figures are a better measure of changes in the general level of prices. b. The real figures will reflect changes in the quantity of output and not changes in the general level of prices. c. The real figures will reflect changes in the general level of prices as well as changes in the quantity of output. d. The real GDP figures adjust for changes in the level of employment.