Inflation measures the increase in the quantity of goods and services produced from each hour of a worker's time

The neoclassical theory of investment

A) links investment spending to stock prices. B) emphasizes that current investment spending depends positively on the expected future growth of GDP. C) emphasizes the role of real interest rates and taxes as determinants of investment. D) suggests that a downturn in real GDP will lead to a sharp fall in investment, which leads to further reductions in GDP through the multiplier.

Real GDP measures the value of goods and services produced in a given year valued using

A) base year prices. B) prices that prevail the same year. C) no prices. D) future prices. E) real rather than nominal prices.