Pad 734 ezto mheducationcom 9 Chapter 7 MC Quiz instructions

Pad 7:34 ezto mheducation.com 9 Chapter 7 MC Quiz instructions I help Question 10 (of 15) Save & ExitSubmit 10 In a press conference, the president of a small country displays a chart showing that GDP has risen by 10 percent every year for five years. He argues that this growth shows the brilliance of his economic policy. However, his chart uses nominal GDP numbers This chart might be wrong because it O only uses five years of information. relies on nominal GDP which might have increased because of output increases and not price increases. O relies on nominal GDP which might have increased because of price increases and not output increases. O is rare for GDP to increase by the same amount for five years. If you are a reporter at the press conference and want to get a more accurate picture of the country\'s economic growth, you should ask for the: unemployment rate which reflects changes in international flows O growth rate of real GDP which excludes price changes. rate of increase in the interest rate. O growth rate of real GDP which includes price changes

Solution

Answer:- In a press conference, the president of a small country displays a chart showing that GDP has risen by 10 percent every year for five years. He argues that this growth shows the brilliance of his economic policy. However, his chart uses nominal GDP numbers.

This chart might be wrong because it

Correct option:- relies on nominal GDP which might have increased because of price increases and not output increases

Reason:- : There are many potential problems here. The biggest is that the president is talking only about nominal GDP and not real GDP. If prices are rising 10 percent per year, then the country is not experiencing any real growth; GDP is getting bigger only because prices are rising.

Answer:- If you were a reporter at the press conference, and wants to get a more accurate picture of the country\'s economic growth, you would ask for the

Correct Answer:- Growth rate of real GDP which excludes price changes

Reason:- Real GDP is calculated using a base year and does not include inflation, it represents an economy\'s nominal GDP if that economy did not realize any price changes when compared to the base year.