3. The business cycle is represented by a. percentage deviations in real GDP from its trend. b. percentage changes in real GDP trend from the previous period c. percentage changes in real GDP from the previous period d. percentage deviations in potential real GDP from its trend 4. Fixed-weight CPI tends to overstate inflation relative to chain-weight CPI over time because a. the quality of goods improves. b. new goods are introduced. c. consumers substitute relatively cheaper goods for more expensive ones. d. All of the above

3. The business cycle is represented by a. percentage deviations in real GDP from its trend. b. percentage changes in real GDP trend from the previous period c. percentage changes in real GDP from the previous period d. percentage deviations in potential real GDP from its trend 4. Fixed-weight CPI tends to overstate inflation relative to chain-weight CPI over time because a. the quality of goods improves. b. new goods are introduced. c. consumers substitute relatively cheaper goods for more expensive ones. d. All of the above

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter15: Poverty And Economic Inequality

Section: Chapter Questions

Problem 35CTQ: Think about the business cycle: during a recession, unemployment increases; it decreases in an...

See similar textbooks

Similar questions

Think about the business cycle: during a recession, unemployment increases; it decreases in an expansionary phase. Explain what happens to TANF, SNAP, and Medicaid programs at each phase of the business cycle (recession, trough, expansion, and peak).
Q) Examine the fundamental causes of a nation’s business cycle fluctuations. Also, examine the relationship between total spending by government and consumers in a nation and the location of the countries’ GDP on the business cycle. Chapter: Business cycles and economic growth
4. A country in which a large majority of the population resides and works outside the country is most likely a country in which...? a. the relationship between GDP and GNP cannot be determined b. GDP is roughly equal to GNP. c. GDP is much larger than GNP. d. GNP is much larger than GDP. 5. As the workforce ages, a. structural and frictional unemployment increase. b. cyclical unemployment declines. c. cyclical unemployment increases. d. the natural rate of unemployment declines.
Suppose that over the last three years, there has been a 10% increase in real GDP, but a 5% increase in nominal GDP, we might conclude thata) The economy has entered a recession.b) The price level has increased, with 5% inflation.c) The price level has decreased, with 5% deflation.d) The economy has experienced a combination of low growth and inflation.
Cosider the following data on U.S GDP:a.What was the growth rate of nominal GDP between 1994 to 2014?b.What was the growth rate of the GDPdeflator between 1994 to 2014?c.What was the real GDP in 1994 measured in 2009 prices?d.What was the real GDP in 2014measured in 2009 prices?e.What was the growth rate of the GDP between 1994 to 2014?f.Was the growth rate of nominal GDP higher or lower than the growth rate of real GDP?Explain.
Problem Set 1: Real and Nominal GDP Below are some data from the land of milk and honey. Year Price of Milk (€) Quantity of Milk (in litres) Price of Honey (€) Quantity of Honey (in jars) 2017 2 100 4 50 2018 2 200 4 100 2019 3 200 6 100 Compute nominal GDP, real GDP and the GDP deflator for each year, using 2017 as the base Compute the percentage change in nominal GDP, real GDP and both GDP deflator and inflation in 2018 and 2019 from the preceding year. For each year, identify the variable that does not change. Explain in words why your answer makes Did economic well-being rise more in 2018 or 2019?
Examine the fundamental causes of a nation’s business cycle fluctuations. Also,examine the relationship between total spending by government and consumers in anation and the location of the countries’ GDP on the business cycle. (250 words)
a. The overall price level increased 50% from the year 2018 to 2019 in the country, and the price index is 100 in 2018, what is the value of price index in 2019? 3. b. Calculate the nominal and real GDP in 2018 and 2019 by taking 2018 as base year.3 c. Take 2019 as base year instead of 2018 and calculate the real GDP for 2018. Is the real GDP of the 2018 changes? Why? Country Name Year Exports Consumption Investment Net Exports Government Expenditure Imports Cambodia 2018 61.315 75.209 23.341 -1.699 4.904 63.014 Cambodia 2019 67.209 81.655 26.660 -1.512 5.288 68.721
a. If nominal GDP rose, does that mean that production had to increase as well? Why or why not?An increase in nominal GDP means there must have been an increase in inputs. may have been due to an increase in the price level. means production must have increased. means production must have decreased.b. What about if real GDP increased?An increase in real GDP may have been due to an increase in the price level. means production must have increased because the price level is not held constant. means production must have decreased. means production must have increased because the price level is held constant.c. Why is it important to use real GDP when comparing changes over time?Changes in real GDP over time will accurately reflect changes in real production. should not be used. We should use changes in nominal GDP when analyzing changes over time. have a time lag, which helps us accurately predict business cycles. will include changes in the price level, which gives a complete picture.
Problem 10-05 algo Nominal GDP increased from roughly $12 trillion in 2004 to $20 trillion in 2018. In the same period prices rose on average by roughly 34 percent. In percentage terms, how much did GDP increase by?
Table 2.5.4 from BEA What categories of consumption expenditures have the highest inflation rate between 2012 and 2021? Are there any categories for which prices are relatively stanle or cheaper?
4. Compute the percentage increase in real GDP from 2004 to 2005.a. 0 percentb. 7 percentc. 22 percentd. 27 percent *base year is 2003