Real GDP Will Increase Only If the

question 40

Multiple Choice

Real GDP will increase only if the

• A)average level of prices rises.
• B)quantity of goods and services produced increases.
• C)unemployment rate rises.
• D)employment rate rises.
• E)employment rate falls.

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Definitions:

Gains from Trade

The benefits that parties obtain by engaging in voluntary trade, allowing them to acquire goods and services they desire at less cost compared to self-production.

Total Surplus

The combined measure of consumer surplus and producer surplus in a market, representing the total benefits to society from the production and consumption of goods and services.

Equilibrium

A state where market supply and demand balance each other, and as a result, prices become stable.

Pumpkin Market

The economic environment or system where pumpkins are bought, sold, or traded.