Which of the Following Relationships Do Forecasters Use to Make

question 71

Multiple Choice

Which of the following relationships do forecasters use to make their one-year-ahead predictions for real GDP?

• A)Real GDP is the sum of consumption, investment, government purchases, and net exports.
• B)Real GDP is determined by the amount of capital, labor, and technology employed in the economy.
• C)Real GDP is determined by the capital and labor employed in the economy.
• D)Real GDP in any year should equal real GDP in the previous year.
• E)Real GDP equals nominal GDP during the base year.

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Definitions:

Tax

Mandatory financial charges imposed by a government on individuals or entities to fund public expenditures.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service and the actual amount they receive, due to higher market prices.

Tax

A compulsory financial charge or levy imposed by a governmental organization in order to fund various public expenditures.

Price Elasticities

The responsiveness of the quantity demanded or supplied of a good to a change in its price.