If Jim Pays $1000 to John

question 85

Multiple Choice

If Jim pays $1000 to John:

• A)​GDP will increase by $1000.
• B)​GDP will increase, but we cannot determine by what amount.
• C)​nominal GDP will increase, but we cannot be sure if real GDP will increase or decrease.
• D)​we need more information in order to determine whether or how much GDP will change.

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Definitions:

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, leading to a decrease in the per unit cost as output increases.

Output

The total amount of goods or services produced by an individual, firm, or country within a given period.

Compact Disc Inputs

Not a standard economic key term, likely refers to inputs required for the production of compact discs as part of a business's operations.

Larger Percentage Increase

A situation where the rate of increase in a particular variable is higher relative to other comparable measures or periods.