Suppose an Economy Has Some Inflation

question 175

Multiple Choice

Suppose an economy has some inflation. Then, after a base year, the value of real GDP will

• A) be less than nominal GDP.
• B) not be different from nominal GDP.
• C) be greater than nominal GDP.
• D) will be approximately half the value of nominal GDP.

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Definitions:

Regression Toward

Regression toward the mean is the phenomenon that if a variable is extreme on its first measurement, it will tend to be closer to the average on its second measurement.

Illusory Correlation

A cognitive bias where a relationship is perceived between two variables even when no such relationship exists.

Sports Magazines

Publications focused on covering sports-related topics, including news, analysis, player profiles, and interviews with personalities from various sports.

Correlation Coefficient

A statistical measure that indicates the extent to which two variables fluctuate together, ranging from -1 to 1, where 1 means perfect positive correlation and -1 means perfect negative correlation.