Suppose that in 2016 Canada's automobile manufacturers produced 2 million cars priced at $20 000 each.And in 2017 they produced 1 million cars priced at $40 000 each.Ceteris paribus,the change in nominal national income is
A)a decrease because fewer cars were produced.
B)an increase because the price of each car increased.
C)insufficient information to know.
D)no change in nominal national income.
E)an increase because of inflation.

Question

Quizplus · Accepted Answer

Nominal national income remains unchanged because the total revenue from car production is the same in both years: 2 million cars x $20,000 = $40 billion in 2016 and 1 million cars x $40,000 = $40 billion in 2017.

Suppose That in 2016 Canada's Automobile Manufacturers Produced 2 Million