Which of the Following Is a True Statement About Real

question 41

Multiple Choice

Which of the following is a true statement about real and nominal GDP?

• A) If nominal GDP increases from one year to the next, we know that production of goods and services has risen.
• B) Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and services year after year.
• C) Increases in average prices do not affect the calculation of nominal GDP.
• D) If real GDP increases from one year to the next, we know that production of goods and services has risen.

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Definitions:

Market Demand Curve

Represents the total quantity of a good that all consumers in a market are willing and able to purchase at each possible price over a period of time.

Individual Demand Curves

Graphical representations showing the relationship between the quantity of a good that a single consumer would buy at each price.

Price Elasticity

Measures the responsiveness or sensitivity of the quantity demanded for a product to a change in its price.

Normal Good

A good for which demand increases as the income of the consumer increases.