Movements in GDP

question 29

Multiple Choice

Movements in GDP

• A) differ greatly from movements in GNP.
• B) do not differ greatly from movements in GNP.
• C) are not allowed to differ at all from movements in GNP by definition.
• D) need to be inflation adjusted in order to match movements in GNP.
• E) are not relevant to an examination of national income.

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Definitions:

Active Fiscal Policy

Government policy that involves altering government spending and taxation to influence the economy.

Short-run Phillips Curve

An economic model depicting an inverse relationship between the rate of unemployment and the rate of inflation in the short-term.

Potential Output

The optimum level of real gross domestic product achievable over a prolonged period without triggering higher inflation.

Expected Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling, as anticipated by consumers and businesses.