BuyFind

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781337091985
BuyFind

Brief Principles of Macroeconomics...

8th Edition
N. Gregory Mankiw
Publisher: Cengage Learning
ISBN: 9781337091985

Solutions

Chapter
Section
Chapter 6, Problem 1CQQ
Textbook Problem

The CPI measures approximately the same economic phenomenon as

a. nominal GDP

b. real GDP

c. the GDP deflator

d. the unemployment rate.

Expert Solution
To determine

Equivalent of Consumer Price Index.

Answer to Problem 1CQQ

Option ‘c’ is the correct answer.

Explanation of Solution

Option (c)

CPI and GDP deflator both measures the overall level of prices in the economy. Thus, option ‘c’ is correct.

Option (a)

Nominal GDP measures the value of the economic output at current market prices. So option ‘a’ is incorrect.

Option (b)

Real GDP measures the value of the economic output adjusted for price changes.  Hence option ‘b’ is incorrect.

Option (d)

Unemployment rate measures the level of unemployment in the economy. So, option ‘d’ is incorrect.

Economics Concept Introduction

Concept Introduction:

Consumer Price index (CPI): It is a measure that examines the changes in price levels of a basket of consumer goods and services for the present time from base year.

Inflation rate: Inflation rate refers to the rate of change in the price level.

GDP deflator: Gross Domestic Product (GDP) deflator is the measure of inflation.

Real GDP: Real GDP refers to the market value of all final goods and services produced in an economy during an accounting year, and measured in constant prices.

Nominal GDP: Nominal GDP refers to the market value of all final goods and services produced in an economy during an accounting year, measured in current prices.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Get Solutions

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Get Solutions

Additional Business Textbook Solutions

Find more solutions based on key concepts
Show solutions
Why should policymakers think about incentives?

Principles of Economics (MindTap Course List)

How can report writers decide what type of graphic to use in a report?

Essentials of Business Communication (MindTap Course List)

What are the different levels in Maslows hierarchy of needs?

Foundations of Business (MindTap Course List)

What does double taxation of corporate income mean? Could income ever be subject to triple taxation? Explain yo...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)

The maturity value of a note includes both principal and interest.

College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)