Econ Unit 5 FA Dummy 1, 2025-26

A news article reports that GDP rose sharply due to a rise in prices, even though production stayed the same. Which GDP figure is most likely being reported?

• Nominal GDP

• Real GDP

• GDP per capita

• Gross National Product

Two countries had the same level of production, but one experienced higher inflation. Which country will likely show a higher Nominal GDP?

• The one with more stable prices

• The one with higher inflation

• Both will show equal Nominal GDP

• The one with higher exports

An economist is comparing two years of GDP data and chooses not to adjust for inflation. What type of GDP is being used in this comparison?

• Nominal GDP

• Real GDP

• Structural GDP

• Balanced GDP

What term refers to a general increase in prices and a decrease in the purchasing value of money?

• Recession

• Inflation

• Deflation

• Stagnation

Inflation is best described as:

• A decrease in government spending over time

• A drop in the cost of borrowing money

• A rise in prices and a fall in money’s value

• A steady increase in employment rates

Which of the following best defines inflation?

• A consistent rise in national output

• A fall in overall employment rates

• A general rise in prices with declining money value

• A sudden drop in interest rates

What is the term for a situation where prices rise and the value of money declines over time?

• Deflation

• Recession

• Inflation

• Recovery

A general increase in the cost of goods and services, which reduces how much money can buy, is known as:

• Inflation

• Deflation

• Expansion

• Disinflation

Which of the following terms refers to a fall in money’s purchasing power and a general rise in price levels?

• Interest

• Recession

• Inflation

• Deficit

A study shows that the price of a typical basket of goods increased by 6% from last year. What economic condition does this most likely indicate?

• Deflation

• Inflation

• Recession

• Depression