FREE Master of Economics: Introduction to Macroeconomics Questions and Answers
Assume that year 1 is used as the starting point. That year's nominal GDP is £500 billion. The nominal GDP has increased to £700 billion by year 2, yet the GDP deflator is only 125. What will the annual real GDP be?
Real GDP was £500 billion, the same as nominal GDP because year 1 served as the foundation year. Prices were half as high in year 1 as they were in year 2, resulting in real GDP in year 2 of £560 billion, or half of £700 billion.
What conditions define a recession in an economy?
The way economists define a recession is as follows.
Which of the following claims regarding economic expansion is untrue?
As long as there is a discrepancy between what people want and what the world can provide, which may last forever, there will be an economic crisis. However, as the discrepancy closes, the problem may become less severe.
Which of the following is considered to be a member of the labor force?
The individuals in the other groups are either unable or unwilling to work.
The four types of people listed below are not taken into account when calculating unemployment rates based on those who receive Job-Seekers' Allowance. Which of these four categories is also not taken into account in the global measurement?
For instance, the international measure of unemployment disregards someone who seeks full-time job even if they are able to find employment for just one hour per week.
Which of the following scenarios would see a rise in real GDP while maintaining the same level of prices?
Real GDP would increase while prices kept the same if the aggregate supply and demand curves both moved right by the same amount.
Which of the subsequent claims is untrue?
The price level doubled in a number of instances in less than a week, and in Hungary in 1946, it did so in less than a day. Regarding the other statements, the text provides some additional examples of people who lose out in these various situations, including employers who negotiate wages in advance who may lose out if inflation is less than they expected, workers who negotiate wages in advance who may lose out if inflation is more than they expected, and everyone who loses out if import prices rise even if inflation is at the expected rate.