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2 years ago

How is it possible for nominal GDP to rise but real GDP to fall from one year to the next?

1 answer:

6 0

Yes, the given statement can be marked as true as it would indicate a larger rise in prices relative to a decrease in output.

<h3>Why would Nominal GDP increase but real GDP decrease?</h3>

When nominal GDP increases and it is higher than real GDP, then it shows that inflation is occurring but when real GDP is higher than nominal, then it means deflation is occurring.

In an economy with a high inflation, it will experience an increase in nominal GDP no matter if the real amount of goods and services produced decreases.

The GDP deflator measures the the overall change in prices in an economy, by using the ratio between real and nominal GDP.

Learn more about the real and nominal GDP here:-

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when it involves two or more buyers buyers and sellers

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3 years ago

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In an expansion, taxes rise and government expenditures fall, and therefore act as automatic ________. Inflation is more like

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Answer:

The correct answer is: stabilizers; destabilizer.

Explanation:

The automatic stabilizer is a government policy that correct fluctuations in the economy through their normal operation and hence they are called automatic stabilizers.

Taxes and government spending are examples of automatic stabilizers.

During an expansion, taxes increase with an increase in income and government spending decrease. These two without any intervention by the government automatically stabilize the economy.

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3 years ago

myrzilka [38]

Answer:

The economic cost for Debbie is 6,200 after considering the implicit cost.

Explanation:

The economic cost for Debbie's will be the explicit cost and opportunity cost of the best rejected opportunity.

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Opportunity Cost: 4,000 normal wedding revenue

Total Cost: 6,200

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3 years ago

The gross pay, benefits and job expenses for two different employees are shown below. Employee A: gross pay $57,200, employee be

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Answer:

a. The total employment compensations for the two employees are the same

Explanation:

Employee compensation refers to payment made to employees by an organization in consideration for the services rendered.

Employee compensation can be in cash form such as salary and wages, perquisites, allowances, incentives, commission, etc.

In the given case,

<u>Compensation for Employee A</u>:

= Gross Pay + Employee benefits - Job expenses

= $57200 + 5300 - 800

= $ 61,700

Similarly,

Compensation for Employee B:

= Gross Pay + Employee benefits - Job expenses

= $56,900 + $6200 - $ 1400

= $61,700

Thus, employment compensation for both A and B are the same.

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3 years ago

Joyce’s office building was destroyed in a fire (adjusted basis of $350,000; fair market value of $400,000). Of the insurance pr

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Answer:

$10,000 gain

Explanation:

The computation of recognized loss or gain is shown below:

= Insurance proceeds amount - adjusted basis

= $360,000 - $350,000

= $10,000 gain

So, it would have a recognized gain of $10,000 by considering the amount of insurance proceed and adjusted basis. We ignore all other information which is given in the question

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3 years ago