If a firm produces a good and then adds it to its inventory rather than selling it, for the purposes of GDP accounting the firm is considered to have "purchased" the good so it will count as part of that period's investment expenditures

If nominal GDP increases by 5 percent a year and the GDP price index rises by 2 percent a year, then real GDP increases by ________

A. 7 percent a year B. 3 percent a year C. 2.5 percent a year D. 10 percent a year

With only two goods, if the income effect is in the same direction as the substitution effect then the good is

a. normal b. inferior but not Giffen c. Giffen d. There is not enough information to answer.