The dollar value of GDP increased approximately 4 percent during the year, but real GDP fell 2 percent. Which of the following best explains this data?
a. The real capacity of the economy increased more rapidly than money output.
b. In the international sector, there was a balance of trade deficit of approximately 2 percent of GDP.
c. The inflation rate was approximately 6 percent during the year.
d. The general level of prices rose approximately 2 percent.
C
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Gresham's Law
A) deals with the theory of regulatory forces in the economy. B) is the tendency for good money to drive bad money out of circulation. C) is the tendency for bad money to drive good money out of circulation. D) was passed in 1913, as part of the Federal Reserve Act.
Empirical studies suggest that:
A. labor productivity has declined throughout U.S. history. B. technological advances account for about 40 percent of U.S. productivity growth. C. the achieving of economies of scale is the most important factor in U.S. economic growth. D. all U.S. economic growth from between 2001 and 2007 can be attributed to increases in the quantity of labor.