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An economy produces only fun and food. The table shows the prices and the quantities of fun and food produced in 2020 and 2021. The base year is 2020. If potential GDP in 2020 was $270 and it grew by 1 percent in 2021, in which phase of the business cycle is the economy? **** The economy is in OA. an expansion; potential GDP is increasing OB. an expansion; real GDP is increasing OC. a recession; potential GDP is increasing at a slower rate than real GDP is increasing because between 2020 and 2021. OD. an expansion; real GDP is increasing at a faster rate than potential GDP is increasing OE. a recession; real GDP is less than potential GDP In 2020 Item Fun Food In 2021 Item Fun Food Quantity 40 60 Quantity 35 65 Price $2 $2 $3 Price $3

An economy produces only fun and food. The table shows the prices and the quantities of fun and food produced in 2020 and 2021. The base year is 2020. If potential GDP in 2020 was $270 and it grew by 1 percent in 2021, in which phase of the business cycle is the economy? **** The economy is in OA. an expansion; potential GDP is increasing OB. an expansion; real GDP is increasing OC. a recession; potential GDP is increasing at a slower rate than real GDP is increasing because between 2020 and 2021. OD. an expansion; real GDP is increasing at a faster rate than potential GDP is increasing OE. a recession; real GDP is less than potential GDP In 2020 Item Fun Food In 2021 Item Fun Food Quantity 40 60 Quantity 35 65 Price $2 $2 $3 Price $3

Essentials of Economics (MindTap Course List)
Essentials of Economics (MindTap Course List)
8th Edition
ISBN:9781337091992
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter15: Measuring A Nation's Income
Section: Chapter Questions
Problem 6CQQ
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An economy produces only fun and food. The table shows the prices and the quantities of fun and food produced in 2020 and 2021. The base year is 2020. If potential GDP in 2020 was $270 and it grew by 1 percent in 2021, in which phase of the business cycle is the economy? The economy is in OA. an expansion; potential GDP is increasing B. an expansion; real GDP is increasing OC. a recession; potential GDP is increasing at a slower rate than real GDP is increasing # f3 7 * OD. an expansion; real GDP is increasing at a faster rate than potential GDP is increasing OE. a recession; real GDP is less than potential GDP $ f4 f5 because % between 2020 and 2021. COLO f6 f7 & Co hp f8 * + fg N f10 ) f11 In 2020 Item Fun Food In 2021 Item Fun Food F12 + Quantity 40 Quantity 35 65 60 insert prt sc Price $2 $2 $3 Price $3 Next 9:00 PM 10/3/2022 delete
Transcribed Image Text:An economy produces only fun and food. The table shows the prices and the quantities of fun and food produced in 2020 and 2021. The base year is 2020. If potential GDP in 2020 was $270 and it grew by 1 percent in 2021, in which phase of the business cycle is the economy? The economy is in OA. an expansion; potential GDP is increasing B. an expansion; real GDP is increasing OC. a recession; potential GDP is increasing at a slower rate than real GDP is increasing # f3 7 * OD. an expansion; real GDP is increasing at a faster rate than potential GDP is increasing OE. a recession; real GDP is less than potential GDP $ f4 f5 because % between 2020 and 2021. COLO f6 f7 & Co hp f8 * + fg N f10 ) f11 In 2020 Item Fun Food In 2021 Item Fun Food F12 + Quantity 40 Quantity 35 65 60 insert prt sc Price $2 $2 $3 Price $3 Next 9:00 PM 10/3/2022 delete
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