Question

1. Which of the following problems is NOT one of the central concerns of macroeconomics?

(a) product price

(b) growth

(c) unemployment

(d) none of the above

2. Real GDP is measured in:

(a) current-year prices

(b) base-year prices

(c) nominal dollars

(d) quality of goods produced

Answer 1

1.(a) product price is not a central concern of macroeconomics.

but the aggregate price level is. and growth and unemployment are concerns of macroeconomics.

2. real GDP is measured on (b) base year prices.

GDP is expressed in terms of the value of goods and services produced. The value is expressed in terms of monetary values. but price level keeps fluctuating hence if price changes the monetary value of goods and services will change too even if the actual product doesn't go up. hence to overcome this problem real GDP is calculated in a fixed price which happens to be a chosen year as a base year.

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