Real GDP Is More Accurate Than Nominal GDP in Making

question 74

Multiple Choice

Real GDP is more accurate than nominal GDP in making comparisons of output over time because

• A)Nominal GDP may change simply because of price changes over time.
• B)Real GDP is not affected by output changes.
• C)Nominal GDP is the hypothetical output that would be produced at full employment.
• D)Real GDP is not affected by changes in productivity or the size of the labor force.

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Definitions:

Negative Correlation

A relationship between two variables in which one variable increases as the other decreases, and vice versa, indicating an inverse association.

Scatterplot

A type of graph used in statistics to visually display and assess the relationship between two quantitative variables by plotting data points on a two-dimensional axis.

Bell-Shaped Curve

A graphical representation of a normal distribution, indicating that most occurrences happen near the mean, with fewer observations noted at the extremes.

Coin Flips

A simple randomization technique or decision-making tool where the outcome of a coin toss is used to choose between two alternatives.