a) Let’s assume the real GDP of country Z is increasing. James concludes that now the citizens of country Z can enjoy more goods and services. Why might his conclusion be wrong? Discuss in detail. b) The GDP of country A is higher than GDP of country B. Floyd concludes that the total income of the citizens of country A must be greater than country B. Why might his conclusion be wrong? When might his conclusion be correct?

a) Let’s assume the real GDP of country Z is increasing. James concludes that now the citizens of country Z can enjoy more goods and services. Why might his conclusion be wrong? Discuss in detail. b) The GDP of country A is higher than GDP of country B. Floyd concludes that the total income of the citizens of country A must be greater than country B. Why might his conclusion be wrong? When might his conclusion be correct?

MACROECONOMICS

14th Edition

ISBN:9781337794985

Author:Baumol

Publisher:Baumol

Chapter6: How Statisticians Measure Inflation

Section: Chapter Questions

Problem 1TY

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If all quantities produced rise by 5 percent and allprices fall by 5 percent, which of the following bestdescribes what occurs?a. Real GDP rises by 5 percent, while nominalGDP falls by 5 percent.b. Real GDP rises by 5 percent, while nominalGDP is unchanged.c. Real GDP is unchanged, while nominal GDP risesby 5 percent.d. Real GDP is unchanged, while nominal GDP fallsby 5 percent.
Course: Macroeconomics Find GDP per capita when the population is 1 billion and GDP is $3 trillion.
If all quantities produced rise by 10 percent and all pricec fall by 10 percent, which of the following occurs?a.Real GDP rises by 10 percent,while nominal GDP falls by 10 percent.bReal GDP rise by 10 percent,while nominal gdp is unchanged.c.Real GDP is unchanged,while nominal GDP rises by 10 percent.d.Real GDP is unchanged,while nominal GDP falls by 10percent.
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