If nominal GDP doubles and the GDP deflator doubles, then real GDP remains const

Question

If nominal GDP doubles and the GDP deflator doubles, then real GDP remains constant doubles triples quadruples GDP per person tell us the income and expenditure of the richest person in the economy poorest person in the economy. Average person in the economy entire economy Many thing that society value, such as good health, high-quality education, enjoyable recreation opportunities, and desirable moral attributes of the population, are not measured as part of GDP. It follows that GDP is not a useful measure of society's welfare GDP is still a useful measure of society's welfare because providing these other attributes is the responsibility of government. GDP is still a useful measure of society's welfare because it measure a nation's ability to pure lease the inputs that can be used to help produce the things that contribute to welfare. GDP is still the best measure of society welfare because these other values cannot actually be measured. The consumer price index is used to monitor changes in the level of wholesale prices in the economy. monitor changes in the cost of living over time. monitor changes in live level of real GDP over line. monitor changes in the stock market. The table below pertains to Iowan, an economy in which the typical consumer's basket consists of 3 pounds of pork and 4 bushels of corn. Refer to Table 24-2. If 2008 is the base year, then the CPI for 2008 was 73.5. 100. 108. 136.1. By far the largest category of goods and services in the CPI basket is housing. transportation. education & communication. food & beverages.

Explanation / Answer

Answer 1:

Real GDP = Nominal GDP / GDP Deflator

THus, when both doubles, the real GDP will remain constant. Option a.

Answer 2:

GDP is an aggregate measure of the average person in the economy. Option c.

Answer 3:

Option d. It is difficlut to measure these values.

Answer 4:

CPI measures changes in the cost of living index in the economy. Option b.

Answer 6:

CPI in the base year is always taken to be 100. Option b.

Answer 7:

Option a. Housing makes 43 per cent of the basket.

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