This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Japan experienced periods of deflation a declining price level during the 1990s. During a ... (Read 90 times)

tth

  • Hero Member
  • *****
  • Posts: 579
on: Jun 29, 2018
Japan experienced periods of deflation  a declining price level  during the 1990s. During a deflationary period, which would be higher: nominal GDP or real GDP? Why? Assume that the base year of choice is prior to the deflationary period.
 
  What will be an ideal response?

Question 2

Explain the output effectof a factor price increase.
 
  What will be an ideal response?


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

GCabra

  • Sr. Member
  • ****
  • Posts: 331
Reply #1 on: Jun 29, 2018
Answer to Question 1

Real GDP would be higher, as long as the base year was before the period of deflation. Nominal GDP would be measured using the lower prices that resulted from the deflation. Real GDP would use the higher prices before the deflation, assuming the base year was before the deflation.

Answer to Question 2

An increase in the price of a factor leads to an increase in the cost of production. When a firm faces higher costs, it is likely to produce less in the short run. When the firm cuts its output, it lowers its demand for all factors of production.


tth

  • Member
  • Posts: 579
Reply 2 on: Jun 29, 2018
:D TYSM

recede

  • Member
  • Posts: 315
Reply 3 on: Yesterday
YES! Correct, THANKS for helping me on my review

« previous next »
 

Did you know?

Bisphosphonates were first developed in the nineteenth century. They were first investigated for use in disorders of bone metabolism in the 1960s. They are now used clinically for the treatment of osteoporosis, Paget's disease, bone metastasis, multiple myeloma, and other conditions that feature bone fragility.

Did you know?

Every flu season is different, and even healthy people can get extremely sick from the flu, as well as spread it to others. The flu season can begin as early as October and last as late as May. Every person over six months of age should get an annual flu vaccine. The vaccine cannot cause you to get influenza, but in some seasons, may not be completely able to prevent you from acquiring influenza due to changes in causative viruses. The viruses in the flu shot are killed—there is no way they can give you the flu. Minor side effects include soreness, redness, or swelling where the shot was given. It is possible to develop a slight fever, and body aches, but these are simply signs that the body is responding to the vaccine and making itself ready to fight off the influenza virus should you come in contact with it.

Did you know?

Giardia is one of the most common intestinal parasites worldwide, and infects up to 20% of the world population, mostly in poorer countries with inadequate sanitation. Infections are most common in children, though chronic Giardia is more common in adults.

Did you know?

Though Candida and Aspergillus species are the most common fungal pathogens causing invasive fungal disease in the immunocompromised, infections due to previously uncommon hyaline and dematiaceous filamentous fungi are occurring more often today. Rare fungal infections, once accurately diagnosed, may require surgical debridement, immunotherapy, and newer antifungals used singly or in combination with older antifungals, on a case-by-case basis.

Did you know?

Asthma-like symptoms were first recorded about 3,500 years ago in Egypt. The first manuscript specifically written about asthma was in the year 1190, describing a condition characterized by sudden breathlessness. The treatments listed in this manuscript include chicken soup, herbs, and sexual abstinence.

Mechanisms of pain at the nociceptor level Mechanisms of pain at the nociceptor level
Rapid sea level rise Rapid sea level rise
Changes in the Level of Education, 1975-2010 Changes in the Level of Education, 1975-2010
Solow Model with Saving Dependent on Income Level Solow Model with Saving Dependent on Income Level
Ice Age Sea Level Ice Age Sea Level
The Effects of a Spinal Cord Injury by Spinal Level The Effects of a Spinal Cord Injury by Spinal Level
Video: Oxygen transport - methods and oxyhemoglobin

For a complete list of videos, visit our video library