Nominal GDP measures the value of all the goods and services produced in current prices. Real GDP is inflation subtracted by the nominal GDP rate. In order for the economy to be in a recession inflation must increase, which means that there must be a decrease in real GDP.

2.What impact do rising energy prices have on the behavior of individual firms?

Rising energy prices would increase the individual firm's private costs such as the production.

3.Why are low interest rates likely to make the inflation problem even worse?

Low interest rates will cause a high demand for these rates. As a result of the high demand, the interest rates will have to rise which would mean it will be undersupplied causing even worse inflation.

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Nominal GDP is the value of all goods and services in a country during a certain period of time. The real GDP is adjusted to inflation, whereas the nominal GDP is not adjusted to inflation. In order for the economy to be in a recession, the real GDP must decline.

2. What impact do rising energy prices have on the behavior of individual firms?

An increase in the energy price for an individual firm will increase their costs of production. This means that there will mostly likely be an increase in the price.

3. Why are low interest rates likely to make the inflation problem even worse?

Low interest rates are likely to make the inflation problem even worse since lower interest rates will lead to a higher demand to borrow money. The supply being fixed, it means that the demand will increase leading to a higher inflation rate.

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-Nominal GDP is a gross domestic product (GDP) figure that has not been adjusted for inflation whereas the Real GDP is an inflation-adjusted measure that reflects the value of all goods and services produced in a given year. In order for recession to occur, the Real GDP must decline

2. What impact do rising energy prices have on the behavior of individual firms?

-Rising energy prices will increase the costs of production for individual firms, which will forcefully increase the cost of the final product or service for the consumers

3. Why are low interest rates likely to make the inflation problem even worse?

-Low interest rates would make the inflation problem worse because the demand for interest rates would then increase. However, the supply would not meet the demand, and because of this the price for interest rates would increase and worsen inflation

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- Nominal GDP is the calculation of national output using the quantity of the produced goods multiplied by the prices of that year. Real GDP is the same calculation of national output but is adjusted for inflation. Real GDP must decrease for their to be a recession.

2. What impact do rising energy prices have on the behavior of individual firms?

– The costs of production will increase and firms will have to pay more for the upkeep of capital.

3. Why are low interest rates likely to make the inflation problem even worse?

Low interest rates means consumers will want to borrow more from banks to buy goods, but the supply would not have changed making the inflation worse.

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2. If the the energy prices increase the firms will adjust their expenses. They can do so by decreasing production, increasing price on their product or using more energy efficient methods.

3. Low interest rates are likely to make the inflation problem worse, because lower interests leads to high demands for interest rates. Since the supply doesn't change, and demand increases causing it to move up the supply line. This then will lease to an increase in the inflation rate and unless some thing is done to change that, will continue to worsen the inflation problem.

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GDP is adjusted to inflation while Nominal GDP is not adjusted. Nominal GDP also represents the current prices of goods and services. In order for the economy to be in a recession the real GDP needs to decline.

2. What impact do rising energy prices have on the behavior of individual firms?

Rising energy prices will effect the behavior of the individual firms. The costs of production will increase and firms will be more attentive when purchasing supplies . Firms might also increase the price of their products.

3. Why are low interest rates likely to make the inflation problem even worse?

Low interest rates are likely to make the inflation problem even worse, because this will eventually increase the demand for certain goods or services. Meanwhile the amount of supply will not have changed indicating that the demand for goods is higher leading to an even greater inflation. It would only increase the inflation problem.

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Nominal GDP is the value, in current prices, of all final goods and services in a country in a given period of time. Real GDP is the value, in constant prices, of all final goods and services in a country in a given period of time. Real GDP must decrease for their to be a recession.

What impact do rising energy prices have on the behavior of individual firms?

Rising energy prices means higher prices of production for firms, this means a restricted output and an unpwards shift in price as demand stays the same. So ultimately more expensive energy=less purchasing power.

Why are low interest rates likely to make the inflation problem even worse?

Low interest rates are likely to make the inflation problem even worse because, lower interest rates means a higher demand for interest rates, but the supply cannot chance, so prices of the the interest rates have to increase, which drives up inflation.

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2) As energy prices rise, individual firms will adjust accordingly to the increase in expenses. They might increase the prices on their products, reduce how much supply they are ordering, or they'll cut off unnecessary expenses. I don't think an individual firm would go as far as laying off workers unless energy prices really shot through the roof. Most they would do with employees might be a temporary wage cut.

3) On a supply and demand graph, since interest rates are lower, consumers will tend to want to borrow more, therefore increasing demand. Since the supply stays put where it is, demand moves up the supply line, which would increase the inflation rate and will continue to do so if it's left alone. Pretty soon, demand will out-pace supply and inflation will run rampant.

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