Question

question 21
1 pts
if the quantity of goods and services produced in the economy decreases,
real gdp would certainly increase.
nominal gdp would certainly increase.
it may be possible for nominal gdp to increase.
it may be possible for real gdp to increase.
question 22
1 pts
the nominal gdp of the u.s. in 2018 was approximately $20.9 trillion. this means that
total spending in 2018 was around $20.9 trillion.
all of the above are true..
total income in 2018 was around $20.9 trillion.
the value of output in 2018 was around $20.9 trillion.

Explanation:

• Question 21:
• Real GDP is calculated using constant prices. If the quantity of goods and services (output) decreases, real GDP will decrease (since \(Real\ GDP=\sum (Quantity\times Base - year\ price)\)).
• Nominal GDP is calculated using current - year prices (\(Nominal\ GDP=\sum (Quantity\times Current - year\ price)\)). If the percentage increase in prices is greater than the percentage decrease in quantity, nominal GDP can increase.
• Question 22:
• By the expenditure approach (\(GDP = C + I+G+(X - M)\)), nominal GDP represents total spending.
• By the income approach (\(GDP=\) sum of all incomes in the economy), nominal GDP represents total income.
• By the production (value - added) approach, nominal GDP represents the value of output.

Answer:

• Question 21: it may be possible for nominal GDP to increase.
• Question 22: all of the above are true.