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- Why do you think that GDP does not grow at a steady rate, but rather speeds up and slows down?Explain how a drop in GDP can influence the level of the interest rate (in 7 lines maximum). A captioned graphic illustration is requiredIf all quantities produced rise by 10%, while all prices fall by 10%, what happens to real GDP? What happens to nominal GDP?
- What is real GDP ?Increases in real GDP are often interpreted as increases in welfare. What are some problems with this interpretation? Which do you think is the biggest problem with it, and why?If you read in the newspaper that the United States’ 2015 real GDP declined while nominal GDP for 2015 grew, how could you explain this?