The real value of any variable is its nominal value:
A. adjusted for inflation.
B. holding the base constant.
C. adjusting for income.
D. holding the basket constant.
A. adjusted for inflation.
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Refer to the above figure. If real GDP is $4 trillion, then
A) actual investment spending equals $1 trillion as planned investment spending plus unplanned inventory increases equal $1 trillion. B) consumption expenditures are too low. C) unplanned inventories will decrease. D) unplanned inventories will increase.
If the U.S. dollar were to cease to be the leading international reserve currency,
A) U.S. households and businesses would be unaffected. B) U.S. households and businesses would be subject to increased exchange rate risk. C) interest rates in the U.S. would be lower. D) the U.S. monetary base would contract.