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Measuring Total Output and Income

6.3 GDP and Economic Well-Being

TRY IT!

What impact would each of the following have on real GDP? Would economic well-being increase or decrease as a result?

  1. On average, people in a country decide to increase the number of hours they work by 5%.
  2. Spending on homeland security increases in response to a terrorist attack.
  3. The price level and nominal GDP increase by 10%.