Macroeconomics
10th Edition
ISBN: 9781319105990
Author: Mankiw, N. Gregory.
Publisher: Worth Publishers,
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Question
Chapter 2, Problem 1QQ
To determine
The correct option.
Expert Solution & Answer
Answer to Problem 1QQ
Option ‘b’ is the correct answer.
Explanation of Solution
Option (b):
The nominal
Option (a):
The nominal GDP measures the economic output in a particular time period, so it is a flow variable (a variable that measures with the reference of time period), not a stock variable (a variable that measurable at a point of time). Thus, option (a) is incorrect.
Option (c):
The value of the economy’s output measured at current price in a particular time period is called nominal GDP. Thus, option (c) is incorrect.
Option (d):
Nominal GDP measures the economic output at current price in a particular time period. Usually, it is for one year not based on a particular point of time. Thus, option (d) is incorrect.
Economics Concept Introduction
Nominal GDP (Gross Domestic Product): Nominal GDP measures the value of economy’s total output in a particular time period.
Flow variable: A flow variable is a variable that can be measured with reference to a period of time.
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Students have asked these similar questions
Real GDPa. is the current dollar value of all goods produced by the citizens of an economy within a given time.b. measures economic activity and income.c. is used primarily to measure long-run changes rather than short-run fluctuations.d. All of the above are correct.
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