15) Suppose we switch the base year from 2000 to 2008. This change in the base year will cause A) nominal GDP in every year to increase. B) nominal GDP in every year to decrease. C) both nominal and real GDP in every year to decrease. D) real GDP in every year to decrease. E) none of the above 16) Pure inflation occurs when A) nominal wages rise faster than all prices. B) all prices rise faster than nominal wages. C) all prices and nominal wages rise by the same percentage. D) the GDP deflator and Consumer Price Index rise by the same percentage. E) none of the above 17) One of the reasons macroeconomists have concerns about inflation is that inflation causes A) real GDP to rise. B) nominal GDP to fall. C) wages to rise as fast as prices. D) real GDP to exceed nominal GDP. E) none of the above 18) Changes in GDP in the short run are caused primarily by A) demand factors. B) supply factors. C) technology. D) capital accumulation. E) all of the above 19) The Okun's law shows the relationship between A) inflation and unemployment rate. B) output growth and unemployment. C) inflation and output growth. D) output growth and money supply. 20) Which of the following about the Phillips curve is not correct? A) It shows the relation between GDP growth and unemployment. B) It has been redefined as a relation between the change in the rate of inflation and the unemployment rate. C) It was first explored by A. W. Phillips. D) The curve is downward sloping. 21) Which of the following factors is not believed to affect output in the long run? A) technology B) monetary policy C) the size of the labor force D) the capital stock
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The base year is used as a reference point for calculating real GDP, which adjusts for inflation. Nominal GDP is not adjusted for inflation, so changing the base year would not directly impact it. Show more…
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