Real GDP Measures the Value of Goods and Services Produced

question 230

Multiple Choice

Real GDP measures the value of goods and services produced in a given year valued using

• A)base year prices.
• B)prices that prevail the same year.
• C)no prices.
• D)future prices.
• E)real rather than nominal prices.

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Definitions:

Normal Good

A good for which demand increases when consumer income rises, and decreases when consumer income falls.

Inferior Good

A type of good whose demand decreases when consumer income rises, contrary to normal goods, which see increased demand as incomes rise.

Inferior Good

A type of good whose demand decreases when the income of consumers increases.

Normal Good

An item whose demand escalates as the income of consumers increases, and contracts when their income decreases.