The GED Crash Course by Alpha

Author:Alpha
Language: eng
Format: epub, pdf
ISBN: 9781465476012
Publisher: DK Publishing

Answers

1. (3) The concept of supply and demand applies to wages as well as products. Wages for nurses tend to keep rising until supply equals demand. An increase in supply (1) would produce a decline in wages only if supply rises above demand. Answer (2) is inaccurate because wages rise when the demand increases, not declines. A growing demand for nurses won’t necessarily lead to wage increases; that happens only if demand exceeds supply. Wages are rising (4), but that’s not because supply is rising; a rising supply of nurses tends to bring down wages. Answer (5) doesn’t relate to supply and demand and, therefore, isn’t a basis on which predictions of wages can be made. Hospitals that cannot afford to pay nurses competitive rates won’t have nurses and would have to close or make some kind of alternative arrangement in which nurses weren’t needed.

2. (5) In this graph, the real GDP line shows the total value of goods and services produced for all years using 2005 prices. Thus, the real GDP line only measures production changes, while unadjusted GDP measures changes in both prices and production together. Because we know that production (real GDP) was flat between 2007 and 2008, we also know the increase in unadjusted GDP was entirely due to inflation. A period of price increases is inflation, not deflation (1). The concept of GDP has little to do with the concept of supply and demand (2). Answer (3) is only a half-truth because unadjusted GDP measures both changes in production and prices together. A recession could be beginning (4), but that doesn’t explain the difference between real GDP and unadjusted GDP.

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