Real GDP Is

question 115

Multiple Choice

Real GDP is

• A) an increase in the average level of prices.
• B) the value of total production when the unemployment rate is 6 percent.
• C) the value of total production of all the nation's farms, factories, shops and offices measured in the prices of a single year.
• D) the value of total production of all the nation's farms, factories, shops and offices measured at the prices of the year it was produced.

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Definitions:

Substitution

The economic principle where consumers replace pricier items with less expensive alternatives when prices rise or their purchasing power decreases.

Indifference Curve

This is a graph representing different bundles of goods between which a consumer is indifferent, meaning that each combination offers the same level of utility to the consumer.

Indifference Curves

Graphical representations in microeconomics showing different bundles of goods between which a consumer is indifferent.

Consumer's Preferences

The subjective tastes and desires that guide consumer behavior in choosing among various goods and services.