Nominal GDP Will Always Equal Real GDP

question 69

Multiple Choice

Nominal GDP will always equal real GDP:

• A)​if prices are declining.
• B)​in the base year.
• C)​if prices are increasing.
• D)​if the economy's total production does not change.

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Definitions:

Long-Run Equilibrium

A state in which all factors of production and costs are variable, allowing firms to make adjustments and leading to a situation where economic profit equals zero.

Just Tangent To

A condition where two curves meet at only one point without intersecting, often used in the context of optimizing problems.

Demand Curve

A graph showing the relationship between the price of a good and the quantity of that good consumers are willing to buy at each price.

New Firms Enter

The process by which new companies start operations in a market, often increasing competition and innovation within the industry.