Bart Operates a Lemonade Stand in Front of His House

question 15

Multiple Choice

Bart operates a lemonade stand in front of his house. His father works at the Springfield Nuclear Power Plant. Which of the following is most likely to be true?

• A) The long run is the same for the power plant as it is for the lemonade stand.
• B) The long run is longer for the power plant than it is for the lemonade stand.
• C) The long run is shorter for the power plant than it is for the lemonade stand.
• D) We cannot compare the long runs because these are different businesses.
• E) It's impossible for the power plant short run to be shorter than the lemonade stand's long run.

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Definitions:

Real GDP

The total value of all goods and services produced by an economy adjusted for inflation, offering a more accurate reflection of an economy's size and growth rate.

Price Level

A gauge of the overall current prices for a broad range of goods and services manufactured in the economy.

Nominal GDP

The market value of all final goods and services produced within a country in a given period, measured in current prices without adjusting for inflation.

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate measure of an economy's size and how it's grown over time.