During World War II, the government did a good job measuring nominal GDP. But if the price

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During World War II, the government did a good job measuring nominal GDP. But if the price level was calculated incorrectly, we might get a completely wrong idea about what happened with real GDP. During World War II, price ceilings were in place. That means that some things that would’ve been expensive were artificially cheap instead. Within a few years of the war’s end, price controls finally ended, and the price level spiked up about 20%. If the true price level during the war was actually 20% higher than reported, would that mean that real GDP is higher than the official number in question 10b in the previous section, lower than that number, or is it still the same as that number?
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Modern Principles of Economics

ISBN: 978-1429278393

3rd edition

Authors: Tyler Cowen, Alex Tabarrok

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