In periods when prices are falling, on average,
A) real GDP will grow as fast as nominal GDP. B) real GDP will grow slower than nominal GDP.
C) real GDP will grow faster than nominal GDP. D) one cannot calculate real GDP.
C
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Which of the following is true of international trade?
A) International trade reduces the total surplus enjoyed by an economy. B) International trade benefits all participants equally. C) International trade in services is not allowed. D) International trade increases overall economic efficiency.
Answer the following questions true (T) or false (F)
1. Economists do not think it is possible to compare the relative utility that two people get from consuming an additional unit of a particular good. 2. Each price-quantity combination on a consumer's demand curve shows the utility-maximizing quantity at the given price. 3. A Giffen good could be either a normal good or an inferior good.