In an Economy Experiencing Persistent Deflation

question 190

Multiple Choice

In an economy experiencing persistent deflation:

• A)potential GDP will necessarily exceed actual GDP.
• B)changes in nominal GDP may either overstate or understate changes in real GDP.
• C)changes in nominal GDP understate changes in real GDP.
• D)changes in nominal GDP overstate changes in real GDP.

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Definitions:

Cognitive Process

Mental activities involved in acquiring, storing, retrieving, and using information, including thinking, reasoning, and problem-solving.

Practice

Repeated exercise in or performance of an activity or skill so as to acquire or maintain proficiency in it.

Task

A piece of work or activity assigned to someone as part of a job or course of study, often requiring effort to complete.

Intent

The purpose or plan that guides an individual's actions or the deliberate determination to perform a specific act.