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Author Question: Why does inflation make nominal GDP a poor measure of the increase in total production from one year ... (Read 49 times)

809779

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on: Jun 29, 2018
Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next?
 
  What will be an ideal response?

Question 2

Refer to Figure 2-5. If the economy is currently producing at point X, what is the opportunity cost of moving to point W?
 
  A) 19 million tons of steel B) 5 million tons of paper
  C) 9 million tons of paper D) 3 million tons of steel


pratush dev

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Reply #1 on: Jun 29, 2018
Answer to Question 1

Nominal GDP can change because of either quantity changes or price changes. When there is inflation, nominal GDP overstates the increase in total production.

Answer to Question 2

D


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809779

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Reply #2 on: Jun 29, 2018
Correct answers!


pratush dev

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Reply #3 on: Jun 29, 2018
Great! Please up vote :D


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