Question 25 In order list the following steps in the prosperity cycle in the order in which they would occur. Start with "Employment increases". AD increases -Employment increases -Consumption increases -Production increases -Incomes increase

Why do you suppose that U.S. GDP is so much higher today than 50 or 100 years ago?

What is potential GDP?

Cross country comparisons of GDP per capita typically use purchasing power parity equivalent exchange rates, which are a measure of the long run equilibrium value of an exchange rate. In fact, we used PPP equivalent exchange rates in this module. Why could using market exchange rates, which sometimes change dramatically in a short period of time, be misleading?

U.S. macroeconomic data are among the best in the world. Given what you learned in the Clear It Up 'How do statisticians measure GDP?', does this surprise you, or does this simply reflect the complexity of a modern economy?

What is the difference between a series of economic data over time measured in nominal terms versus the same data series over time measured in real terms?

Is it possible for GDP to rise while at the same time per capita GDP is falling? Is it possible for GDP to fall while per capita GDP is rising?

Using data from Table 19.5 how much of the nominal GDP growth from 1980 to 1990 was real GDP and how much was inflation?

What does GDP not tell us about the economy?

Why do you think that GDP does not grow at a steady rate, but rather speeds up and slows down?