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# Real GDP

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If nominal GDP was \$480 (billion) in 2001 and if the price level rose by 20 percent from 1999 to 2001, then the 2001 GDP, measured in 1999 prices, was (in billions):

a. \$300.

b. \$576.

c. \$340.

d. \$400.

2001 GDP, measured in 1999 prices, was (in billions):It would be Nominal GDP of current year *100/(100+Price rise)
=480*100/120
=\$400 bn
Hence option d. is the answer

If a firm's marginal revenue exceeds its marginal cost, maximum-profit rules require that the firm

a. increases its output in both perfect and imperfect competition.

b. increases its output in perfect but not necessarily in imperfect competition.

c. increases its output in imperfect but not necessarily in perfect competition.

d. decreases its output in both perfect and imperfect competition.

e. increases price, not output, in both perfect and imperfect competition.

a. increases its output in both perfect and imperfect competition

This is because as MR exceeds MC then the firm should increase the output till MR=MC. Hence there ...

#### Solution Summary

Response provides the steps to compute Real GDP

\$2.19