MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
10th Edition
ISBN: 9781319467203
Author: Mankiw
Publisher: MAC HIGHER
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Question
Chapter 2, Problem 1QQ
To determine
The correct option.
Expert Solution & Answer
Answer to Problem 1QQ
Option ‘b’ is the correct answer.
Explanation of Solution
Option (b):
The nominal
Option (a):
The nominal GDP measures the economic output in a particular time period, so it is a flow variable (a variable that measures with the reference of time period), not a stock variable (a variable that measurable at a point of time). Thus, option (a) is incorrect.
Option (c):
The value of the economy’s output measured at current price in a particular time period is called nominal GDP. Thus, option (c) is incorrect.
Option (d):
Nominal GDP measures the economic output at current price in a particular time period. Usually, it is for one year not based on a particular point of time. Thus, option (d) is incorrect.
Economics Concept Introduction
Nominal GDP (Gross Domestic Product): Nominal GDP measures the value of economy’s total output in a particular time period.
Flow variable: A flow variable is a variable that can be measured with reference to a period of time.
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Students have asked these similar questions
Real GDPa. is the current dollar value of all goods produced by the citizens of an economy within a given time.b. measures economic activity and income.c. is used primarily to measure long-run changes rather than short-run fluctuations.d. All of the above are correct.
1.
A. Is nominal GDP a flow variable?
B. Is real GDP a flow variable?
C. Is labor force a stock variable?
D. Is exports a stock variable?
What happens to disposable personal income if tax rates increased?
How could nominal GDP increase but real GDP remain the same?
Which is a better indicator of growth in job opportunities: an increase in nominal GDP or real GDP?
Is it possible for real GDP to increase and there to be no increase in employment?
Determine the effect on GDP for the following.
a. Consumption increases.
b. Government spending falls.
Chapter 2 Solutions
MACROECONOMICS+ACHIEVE 1-TERM AC (LL)
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