CH2SQ - Mankiw Chapter 2 Study Questions 1 Suppose Real GDP...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Mankiw, Chapter 2 Study Questions 1. Suppose Real GDP and Nominal GDP both rise in 1998, but Real GDP rises at a faster rate than Nominal GDP. What does this imply about inflation in 1998? 2. Explain why Real GDP is a better measure of overall production in an economy than Nominal GDP. 3. Explain how it would be possible for Real G D P to rise at the same time that Real G N P falls. 4. (10 points) When the average level of prices in a country falls, economists say that the country is experiencing deflation . a. (5 points) If a country is experiencing deflation, what does this imply about the country's GDP Deflator? Answer in one or two sentences. b. (5 points) Suppose a country is experiencing deflation and that Nominal GDP is rising. Explain in 1 or 2 sentences what these facts imply about Real GDP. (Is Real GDP rising, falling, or indeterminate -- and why?) 5. (10 points) In late January of 1994 the Commerce Department reported that Real GDP grew at a seasonally adjusted annual rate of 5.9% in the fourth quarter of 1993. a. (5 points) Is this growth best considered as "strong," "weak," or "average?" Explain in one or two sentences. b.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/30/2008 for the course ECO 3307 taught by Professor Green during the Spring '08 term at Baylor.

Page1 / 2

CH2SQ - Mankiw Chapter 2 Study Questions 1 Suppose Real GDP...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online