Table 64 -Refer to Table 6

question 161

Multiple Choice

Table 6.4
$$\begin{array}{l}\text { Table } 6.4\\\begin{array} { c c c } \text { Year } & \text { Price Index } & \text { Nominal GDP } \\\hline 2001 & 100 & \$ 95 \text { billion } \\2002 & 105 & \$ 110 \text { billion } \\2003 & 110 & \$ 120 \text { billion } \\2004 & 120 & \$ 125 \text { billion } \\2005 & 132 & \$ 137.5 \text { billion }\end{array}\end{array}$$
-Refer to Table 6.4, which shows the price indexes and the nominal gross domestic product (GDP) for an economy from 2001 to 2005. The real GDP _____ between 2001 and 2002.

• A) increased by slightly less than $10 billion
• B) decreased by slightly more than $5 billion
• C) remained constant
• D) increased by only about $1 billion
• E) increased more than $20 billion

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Definitions:

Supply

The total amount of a certain good or service that is available for purchase at a particular price level and time.

Perfectly Inelastic

Refers to a market situation where the quantity demanded or supplied does not change regardless of the price level changes.

Perfectly Elastic

Describes a market situation where quantity demanded or supplied changes by an infinite amount in response to any change in prices.

Demand

The willingness and ability of consumers to purchase goods and services at various prices.