Answer the question based on the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year
Refer to the above data. For the years shown, the growth of
A.
Real GDP exceeds the growth of nominal GDP
B.
Nominal GDP exactly reflects increases in real output
C.
Nominal GDP overstates increases in real output
D.
Nominal GDP understates increases in real output
C.
Nominal GDP overstates increases in real output
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Suppose that during a given time period the implicit cost for a business was $1,500 and that the explicit cost was $6,000. Also suppose that the firm sold 1,000 units of its products at $7 per item. We can conclude that the firm's
A) accounting profit was $1,000, and its economic profit was -$500. B) accounting and economic profits were both $1000. C) accounting profit was -$500, and economic profit was $1,000. D) accounting profit was $1000, and economic profit was -$1,500.
If a customer values good A at $15, and it costs the firm $10 to produce, the firm can increase its profits if
a. Redesign the product such that it delivers $16 in customer value b. Redesign the production process so that the costs fall to $9 c. One or both of the above d. None of the above