Essentials of Economics (MindTap Course List)
8th Edition
ISBN: 9781337091992
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 16, Problem 1CQQ
To determine
Equivalent ofConsumer
Expert Solution & Answer
Answer to Problem 1CQQ
Option ‘c’ is the correct answer.
Explanation of Solution
Option (c)
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)
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.
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Essentials of Economics (MindTap Course List)
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