Question

the economy experiences an increase in the price level and an increase in real domestic output. which is a likely explanation? multiple choice interest rates have increased. business taxes have increased. net exports have increased. wage rates have fallen.

Answer 1

The price level is rising, real domestic output is rising, and net exports are rising in the economy.

Real GDP measures the value of the goods and services produced by an economy over a specific time period while taking inflation into account. In essence, it determines a country's overall economic productivity after taking price fluctuations into consideration.

Governments use both nominal and real GDP metrics to analyse economic growth and purchasing power over time. This is done using the GDP price deflator, sometimes referred to as the implicit price deflator, which monitors changes in the cost of all goods and services produced in an economy.

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