We Are Told That Over the Past Year Actual Real

question 33

Multiple Choice

We are told that over the past year actual real GDP has risen by three percent.This fact alone is enough to tell us that

• A)the unemployment rate has fallen.
• B)the inflation rate has risen.
• C)the actual real GDP is above natural real GDP.
• D)productivity has grown.
• E)none of the above.

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Definitions:

Purely Competitive

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and complete information, leading to price taking behavior.

Equilibrium Price

The market price at which the quantity of goods demanded equals the quantity supplied, leading to market stability.

Market Demand

The combined volume of a good or service that consumers in a marketplace are ready and capable of buying at assorted prices.

Marginal Cost

The funding necessary to manufacture an extra unit of a good or service.