A series of methodological improvements to the consumer


A series of methodological improvements to the Consumer Price Index that will continue into 1999 is expected to add about half a percentage point to measured productivity growth, raising the economy's sustainable rate of GDP growth from between 2 percent and 2.25 percent to between 2.5 percent and 2.75 percent." This will increase measured productivity growth because

a) of the inverse relationship between inflation and unemployment

b) lower inflation reduces uncertainty and increases investment, which promotes growth

c) if inflation comprises less of nominal GDP increases, real output increases must comprise more

d) this clipping is incorrect - changing the way something is measured should have no impact on growth 7

Solution Preview :

Prepared by a verified Expert
Macroeconomics: A series of methodological improvements to the consumer
Reference No:- TGS01416946

Now Priced at $10 (50% Discount)

Recommended (94%)

Rated (4.6/5)