Suppose a small economy produces only HD TV sets. In year 1,100,000 sets are pro

Question

Suppose a small economy produces only HD TV sets. In year 1,100,000 sets are produces and sold at a price of $ 1.200 each. In year 2,100,000 sets are produced and sold at a price of & 1,000 each As a result: Norinal GDP stays constant while real GDP decreases Nominal GDP decreases, while real GDP stays constant Norminal GDP and real GDP both decrease Norminal GDP decreases even more Suppose a small economy produces only MP_3 players. In year 1,10,000 MP_3 players are produce and sold at a price of $ 100 each. In year 2,12,000MP_3 players are produced and sold at a price of $80 each. Which of the following statements in true? real GDP and nominal GDP both increase Real GDP increases while nominal GDP remains constant real GDP decreases while nominal GDP increases Real GDP increases while nominal GDP decreases Economists and policy makers are committed to encouraging a high and growing level of real GDP because: This implies a lower price level This means a higher level of unemployment This implies an increase in investment This means greater consumption opportunities High rates of unemployment: Indicate that society is not using a large portion of the talent and skills of its people A re associated with higher once levels Always correspond to a decrease in nominal GDP Do not affect an economy's output of goods and services

Explanation / Answer

11. The correct answer is option B: Nominal GDP decreases while Real GDP stays constant.

12. The correct answer is option D: Real GDP increases while Nominal GDP decreases.

13. The correct answer is option D: This means greater consumption opportunities

14. The correct answer is option A: Indicate that society is not using a large portion of the talent and skills of its people

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