If Real GDP Rises and the GDP Price Index Has

question 30

Multiple Choice

If real GDP rises and the GDP price index has increased,

• A) the percentage increase in nominal GDP must have been less than the percentage increase in the price level.
• B) nominal GDP may have either increased or decreased.
• C) nominal GDP must have increased.
• D) nominal GDP must have fallen.

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Definitions:

Perfectly Competitive

A market structure characterized by a large number of small firms, identical products sold by all firms, no barriers to entry or exit, and perfect information among buyers and sellers.

Purification Costs

The expenditures involved in the process of removing impurities or contaminants from a substance, often related to environmental procedures or manufacturing processes.

U-Shaped AVC

The U-Shaped Average Variable Cost curve represents how the per-unit production expenses initially decrease due to increasing returns and subsequently increase after reaching a certain scale due to diminishing returns.

Perfectly Competitive

A perfectly competitive market is one with many buyers and sellers, where no single entity can influence the market price, and all products are identical.