The Fact That Nominal GDP Has Risen Faster Than Real

question 238

Multiple Choice

The fact that nominal GDP has risen faster than real GDP

• A) suggests that the base year of the GDP price index has been shifted.
• B) tells us nothing about what has happened to the price level.
• C) suggests that the general price level has fallen.
• D) suggests that the general price level has risen.

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Definitions:

Economic Profit

The return flowing to those who provide the economy with the economic resource of entrepreneurial ability; the total revenue of a firm less its economic costs (which include both explicit costs and implicit costs); also called “pure profit” and “above-normal profit.”

X-Inefficiency

The difference between actual output and the maximum possible output that could be achieved with the same input of resources, due to inefficiencies within a firm.

Dynamic Change

The process of constant, sometimes unpredictable change within systems or environments, affecting economic, social, or technological aspects over time.

Usury Laws

Legislation that limits the amount of interest that can be charged on loans.