Which of the Following Affect the Values of Inflation and Unemployment

question 128

Multiple Choice

Which of the following affect the values of inflation and unemployment?
I. changes in government spending
II. expectations about the price level
III. changes in nominal wages
IV. changes in money supply

• A) I and IV only
• B) I, II, and IV only
• C) II and III only
• D) I, II, III, and IV

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Definitions:

Nominal GDP

The total value, in current market prices, of all the final goods and services generated within a country's borders over a certain time period.

Real GDP

Real GDP, which adjusts for price changes to offer a true measure of an economy's overall size and its growth trajectory.

Base-Year Prices

Prices of goods and services from a specific base year, used to calculate real values and remove the effect of inflation over time.

Real GDP

Gross Domestic Product adjusted for inflation, measuring the value of goods and services produced by a country in a specified period.