Suppose a Small Economy Produces Only MP3 Players

question 66

Multiple Choice

Suppose a small economy produces only MP3 players. In year one, 10,000 MP3 players are produced and sold at a price of $100 each. In year two, 12,000 MP3 players are produced and sold
At a price of $80 each. Which of the following statements is true?

• A) Real GDP and nominal GDP both increase.
• B) Real GDP increases, while nominal GDP remains constant.
• C) Real GDP decreases, while nominal GDP increases.
• D) Real GDP increases, while nominal GDP decreases.

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Definitions:

Allen Gardner

An American psychologist known for his work in teaching sign language to chimpanzees, notably a chimp named Washoe.

Beatrix Gardner

A psychologist known for her work with sign language in non-human primates, particularly with a chimpanzee named Washoe.

David Premack

A psychologist known for the Premack Principle, which suggests that more probable behaviors can reinforce less probable behaviors.

Herbert Terrace

A psychologist known for his work in animal cognition, especially in language learning in chimpanzees.