Why Does a Change in GDP Affect Unit Costs and the Price

question 4

Multiple Choice

Why does a change in GDP affect unit costs and the price level?

• A) as GDP increases,productivity increases.
• B) as GDP increases the price of non-labor inputs increases and the nominal wage tends to increase.
• C) as GDP decreases,there are efficient gains
• D) as GDP increases,economies of scale allow for lower unit costs.
• E) as GDP increases the price of non-labor inputs decreases and the nominal wage tends to increase.

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Definitions:

High-Quality Energy

Energy that is concentrated and easily transformed into other forms of energy, such as electricity and gasoline, with a high efficiency rate.

Scientific Hypotheses

Proposed explanations for a phenomenon, based on observation, which can be tested through experimentation or observation.

Deductive Reasoning

A logical process in which a conclusion follows necessarily from the set of premises provided, moving from general principles to specific instances.

Potential Energy

The energy possessed by an object due to its position or configuration, capable of being transformed into kinetic energy.