Nominal GDP is lower this year than last. We can conclude that A) Price levels are lower this year. B) Production levels are lower this year. C) There is more unemployment this year. D) We need more information before commenting.
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- Which of the following macroeconomic variables is the most seasonally procyclical? 1- Expenditure on services 2- The unemployment rate 3- Expenditure on durable goods 4- The real wageIs nominal GDP larger or smaller than real GDP in Panel A data? Explain why specifically. (Note that the base year for Real GDP is 2012.)Nominal GDP in Nowhereland in 2002 and 2003 increased from $4 trillion to $4.8 trillion. Can you say that the production of goods and services in Nowhereland has increased between 2002 and 2003? Why or why not?
- Which of the following would be considered a leading indicator? Question options: 1) Inflation rate for services 2) Personal income 3) Inventories-to-sales ratio 4) Labor costs per unit of output 5) Consumer expectationsThe GDP deflator measures A .the changes in aggregate prices of all final goods and services produced within a country’s borders within a certain time period and incorporates the relevant parts of the CPI and PPI statistics. B. the inflation rate based on consumer cost of living over time, turning dollar figures into meaningful measures of purchasing power. C. the inflation rate based on the producer price index, turning dollar figures into meaningful measures of purchasing power. D. the inflation rate of both exports and imports over time, turning dollar figures into meaningful measures of purchasing power.Which statement best describes the difference between Nominal and Real GDP? Group of answer choices Nominal GDP is Real GDP that has been adjusted to remove the distorting effects of inflation. Real GDP is calculated using current market prices, while Nominal GDP is calculated using the average prices of the last 5 years. Nominal GDP is calculated using current market prices, while Real GDP is calculated using the prices of the previous year. Real GDP is Nominal GDP which has been adjusted to remove the distorting effects of inflation.
- 1. Data on business investment can be a good indicator of whether the economy will likely be in a recession soon. This kind of data is called a ________ economic indicator. 2. Similarly, data on personal income can be a good indicator of whether the economy is currently in a recession. This kind of data is called a ________ economic indicator.Label each statement according to whether it describes the consumer price index (CPI) or GDP deflator. Statements may describe one, both, or neither of the terms. If both labels apply, place both in the box. If neither applies, leave the box blank. 1. Is equal to 100 for the base year 2. is based on commonly used consumer goods only 3. includes the quantity and price of a 747 aircraft produced 4. equals nominal GDP divided by real GDP, times 100 5. uses the same price for goods in the market basket and adjusts quantities to reflect changes over time 6. is subject to biases because it does not reflect changes in buying patterns 7. would include the price of imported tomatesFor example, an increase in the money supply, a __________ variable, will cause the price level, a _______ variable, to increase but will have no long-run effect on the quantity of goods and services the economy can produce, a variable. The distinction between real variables and nominal variables is known as ______.
- Deflation is particularly bad for an economy in recession for all of the following reasons EXCEPT a-with deflation people spend less expecting prices to be lower in the future b- the rising prices makes goods more expensive c- with deflation the value of assets declines while the value of loans does not - this lowers wealth and further depresses spendingWhich of the following statements is false? A) The GDP deflator includes also imports. B) The CPI is a price index that covers a wide range of goods and services bought by households. C) The GDP deflator is a price index that covers all goods and services included in GDP. D) The CPI includes foreign goods.GDP is a very important measure of economic performance. It is also used to measure standard of living in a country and compare different economies. However, like many other economic measures it is not perfect. This topic is covered in chapter 6. Please discuss two shortcomings of GDP as a measure of economic well-being.