MindTap Economics, 2 terms (12 months) Printed Access Card for Mankiw's Principles of Economics, 8th (MindTap Course List)
8th Edition
ISBN: 9781337096539
Author: N. Gregory Mankiw
Publisher: Cengage Learning
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Question
Chapter 24, Problem 1CQQ
To determine
Equivalent ofConsumer Price Index.
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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Click on the link to study the Economics in the News. Then answer the following questions.
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3. Use the AS-AD model to show the changes in aggregate demand and aggregate supply that occurred in
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Price level (GDP deflator, 2009=100)
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Fed Raises Rates As Job Gains, Firming Inflation Stoke Confidence
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When the Fed raises the interest rate,
A. aggregate demand decreases and short-run aggregate supply increases, and the price level falls
B. aggregate demand increases and real GDP increases
C. aggregate demand decreases and the price level falls
D. short-run aggregate supply increases and the price level falls
The graph shows the long-run aggregate supply curve and the short-run aggregate supply curve.
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Millennials Are Starting to Spend More
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D. remain stuck in a below full-employment equilibrium
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Chapter 24 Solutions
MindTap Economics, 2 terms (12 months) Printed Access Card for Mankiw's Principles of Economics, 8th (MindTap Course List)
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