Potential GDP isSelect one:O A. the same as nominal GDP.O B.O C.O D.O E.equal to real GDP multiplied by the price level.equal to nominal GDP multiplied by the price level.the maximum amount of GDP that can be produced while avoiding shortages of labour, capital, land, and entrepreneurship that wouldbring rising inflation.the same as real GDP.

Gross domestic product (GDP) is the market value of final goods and services produced within the…

Potential GDP is Select one: O A. the same as nominal GDP. OB. equal to real GDP multiplied by the price level. equal to nominal GDP multiplied by the price level. O C. O D. the maximum amount of GDP that can be produced while avoiding shortages of labour, capital, land, and entrepreneurship that would bring rising inflation. O E. the same as real GDP.

Potential GDP is Select one: O A. the same as nominal GDP. OB. equal to real GDP multiplied by the price level. equal to nominal GDP multiplied by the price level. O C. O D. the maximum amount of GDP that can be produced while avoiding shortages of labour, capital, land, and entrepreneurship that would bring rising inflation. O E. the same as real GDP.

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter20: Economic Growth In The Global Economy

Section: Chapter Questions

Problem 2P

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magine an economy where the overall price level has been rising over the last twenty years. (No exceptions!) Which of the following statements would be correct for this economy?The nominal GDP must be larger than the real GDP for any given year in that twenty year period. The nominal GDP must be lower than the real GDP for any given year in that twenty year period. The growth rate of the nominal GDP must be lower than the growth rate of the real GDP for any given year in that twenty year period. The growth rate of the nominal GDP must be higher than the growth rate of the real GDP for any given year in that twenty year period.
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.
Real GDP in 2015 was SAR 12,247 billion. It was SAR13,206 billion in 2018. The population of Saudi Arabia increased from 22.9 million to 25.4 million over this time. a. Determine the actual GDP per person for 2015 and 2018. How much did output per individual increase throughout this time, on average? b. What would real GDP have been in 2018 if real GDP had increased by 3% year from -2015 to 2018?
The CPI is more commonly used as a gauge of inflation than the GDP deflator is becaust the O a. GDP deflator cannot be used to gauge inflation. O b. CPI is easier to measure. O c. CPI better reflects the goods and services bought by consumers. O d. CPI includes more goods and services that the GDP deflator does. Note:- Please avoid using ChatGPT and refrain from providing handwritten solutions; otherwise, I will definitely give a downvote. Also, be mindful of plagiarism. Answer completely and accurate answer. Rest assured, you will receive an upvote if the answer is accurate.
Why is per capita gross domestic product (per capita GDP) better than gross domestic product (GDP) as a measure of a country's wealth? O Location and land mass have a large effect on GDP and must be considered in assessing a country's economy. O Because per capita GDP takes population into account, it is more useful for comparing the standard of living in different countries. O Per capita GDP provides information on income, while GDP only provides information on investment. O Per capita GDP includes the value of land, minerals, and crops not counted by normal GDP. The advantages of the sole proprietorship include O ease of start-up © full control ob business decisions © exclusive rights to profits © all of the above
economic Suppose that an economy’s production function is Cobb–Douglas with parameter a=0.3. a. What fractions of income do capital and labor receive? b. Suppose that immigration increases the labor force by 10 percent.What happens to total output (in percent)? The rental price of capital? The real wage? c. Suppose that a gift of capital from abroad raises the capital stock by 10 percent.What happens to total output (in percent)? The rental price of capital? The real wage? d. Suppose that a technological advance raises the value of the parameter A by 10 percent. What happens to total output (in percent)? The rental price of capital? The real wage?
Give typing answer with explanation and conclusion Suppose the real GDP of an economy is $500 billion dollars and its unemployment rate is 6%. If the natural rate of unemployment is estimated at 4%, what is the value of the country’s potential GDP (LAS) in billions of dollars? Value of the country’s potential GDP (LAS) is $ billion.
Suppose that Glitter Gulch, a gold mining firm, increased its sales revenues on newly mined gold from $120 million to $240 million between one year and the next. a. Assuming that the price of gold increased by 100 percent over the same period, by what percentage did Glitter Gulch’s real output change? _______ percent b. If the price of gold had not changed, what would have been the change in value of Glitter Gulch’s real output? $________ million
using the table below giving the quantity and price of goods producedin an economy in two periods in suitable units, assuming that there are only three goodsproduced in the economy. Consider the economy described above a) What is nominal GDP in 2003 and in 2004? By what percentage does nominalGDP change from 2003 to 2004?b) Using the prices for 2003 as the set of common prices, what is real GDP in 2003and in 2004? By what percentage does real GDP change from 2003 to 2004?c) Using the prices for 2004 as the set of common prices, what is real GDP in 2003and in 2004? By what percentage does real GDP change from 2003 to 2004?d) Why are the two output growth rates constructed in (b) and (c) different? Whichone is correct? Explain your answer.
So far, we have learned to measure real GDP, but how do we end up with that real GDP? Of all of the different amountsof national income and price levels that might exist, how do we gravitate toward the one that gets measured each year asreal GDP?In short, it is the interaction of the buyers and producers of all output that determines both the national income (real GDP)and the price level. In other words, the intersection of aggregate demand (AD) and short-run aggregate supply (SRAS)determines the short-run equilibrium output and price level.Once we have a short-run equilibrium output, we can then compare it to the full employment output to figure out where inthe business cycle we are. If current real GDP is less than full employment output, an economy is in a recession. If currentreal GDP is higher than full employment output, an economy is experiencing a boom. If the current output is equal to thefull-employment output, then we say that the economy is in long-run equilibrium. The…
In an economy, potential GDP is $20 trillion and the natural unemployment rate is 4 percent. If the unemployment rate rises to 6 percent, what is the value of real GDP predicted by Okun's Law? Real GDP is _______. A. $20.4 trillion B. $19.6 trillion C. $20.8 trillion D. $19.2 trillion
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