Your uncle comes to you with an investment idea. He tells you that the nominal G
ID: 1206296 • Letter: Y
Question
Your uncle comes to you with an investment idea. He tells you that the nominal GDP of Paradisia quadrupled over the past year and suggests that you invest there. Unemployment is at 20 percent and inflation over the last year was 500 percent. This opportunity seems like a:
A.) good investment given the expansion of money, the increase in real GDP, and the low unemployment rate.
B.)good investment given the neutrality of money, the increase in real GDP, and the low unemployment rate.
C.)poor investment given the neutrality of money, the decline in real GDP, and the high unemployment rate.
D.) poor investment given the neutrality of money, the increase in real GDP, and the high unemployment rate
Explanation / Answer
Answer:
Your uncle comes to you with an investment idea. He tells you that the nominal GDP of Paradisia quadrupled over the past year and suggests that you invest there. Unemployment is at 20 percent and inflation over the last year was 500 percent. This opportunity seems like a:
C) poor investment given the neutrality of money, the decline in real GDP, and the high unemployment rate.
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