The island of Freedonia has two residents, Stan and Fran. In year one Freedonia produces goods worth $500, and consumption is divided evenly between Stan and Fran, so that each consumes $250 worth of goods. In year two, the real value of production rises to $600, but this time Fran receives $500 worth of goods and Stan receives only $100 worth of goods. What can we say about the GDP and collective welfare of Freedonia in year two relative to year one? GDP has risen and welfare has fallen Neither GDP nor welfare has risen GDP has stayed the same and welfare has ris GDP has risen but we cannot be sure what ha GDP has risen and welfare has stayed the sar Group of answer choices

The island of Freedonia has two residents, Stan and Fran. In year one Freedonia produces goods worth $500, and consumption is divided evenly between Stan and Fran, so that each consumes $250 worth of goods. In year two, the real value of production rises to $600, but this time Fran receives $500 worth of goods and Stan receives only $100 worth of goods. What can we say about the GDP and collective welfare of Freedonia in year two relative to year one? GDP has risen and welfare has fallen Neither GDP nor welfare has risen GDP has stayed the same and welfare has ris GDP has risen but we cannot be sure what ha GDP has risen and welfare has stayed the sar Group of answer choices

Exploring Economics

8th Edition

ISBN:9781544336329

Author:Robert L. Sexton

Publisher:Robert L. Sexton

Chapter19: Measuring Economic Performance

Section: Chapter Questions

Problem 1P

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