macro econ final

A steel company sells some steel to a bicycle company fro $150. the bicycle company uses the steel to produce a bicycle, which sells for $250. Taken together, these two transactions contribute _________

$250 to gdp products used to produce another product are not included in gdp

one bag of flour is sold for $1 to a bakery, which uses the flour to bake bread that is sold fro $3 to consumers. a second bag of flour is sold to a consumer in a grocery store for $2. Taking these three transactions into account, what is the effect on gdp?

gdp increases $5 because products used to make other products are not included in gdp unless it is to a consumer

changes in nominal gdp reflect _________

only changes in the amounts being produced

if nominal gdp doubles and the gdp deflator doubles, then real gdp________

remains constant

define gdp

the market value of all final goods and services produced within a country in a given period of time

the term inflation is used to describe a situation in which

the overall level of prices in the economy is increasing