Econ-222 Lindahl Chapter 7

Given the information about the economy of Pakistan, calculate Pakistan's GDP. Note that the currency of Pakistan is the Rupee. Assume that the values are all current and no conversions need to be made. The government purchases: 2.60 trillions of Rupees. Individuals consume: 8.20 trillions of Rupees. Individuals save: 5.59 trillions of Rupees. Businesses invest: 1.45 trillions of Rupees. Foreigners spend: 0.54 trillions of Rupees to purchase Pakistani firms. Pakistan imports: 2.37 trillions of Rupees. Pakistan exports: 1.23 trillions of Rupees.

11.11 trillion rupees

Consider the table. Shirts Pants Year Price Quantity Price Quantity 2013 $5.00 2000 $15.00 3000 2014 $8.00 1900 $20.00 2500 The table contains prices and output for a two good economy. Nominal and real GDP in 2013 are both $55,000. Use the information in the table to answer the questions. What is nominal GDP in 2014? $________________ What is real GDP in 2014? Use 2013 as the base year. $________________ Real output from 2013 to 2014 has a)increased. b)decreased. c)experienced inflation. d)stayed the same.

65200, 47000, b

Suppose that Pandastan has a GDP of $5 billion and a population of 2 million, while Tigerstan has a GDP of $3 billion and a population of 1 million. Which country has a higher GDP per capita, and what is that value? a) Tigerstan; $3,000 b) Tigerstan; $3,333 c) Pandastan; $2,500 d) Pandastan; $4,000

a

Which of the examples provides the best evidence that inflation has occurred? a)A person whose salary has remained the same is able to purchase more goods and services. b)A person whose salary has increased is able to purchase fewer goods and services. c)A person whose salary has decreased is able to purchase fewer goods and services. d)A person whose salary has decreased is able to purchase more goods and services. e)A person whose salary has increased is able to purchase more goods and services.

b

Calculate the GDP of Dinoland using the expenditures approach given the following data: personal consumption expenditures = $10 billion; gross private domestic investment = $5 billion; government spending = $3 billion; exports = $2 billion, imports = $1 billion. a) $12 billion b) $19 billion c) $18 billion d) $17 billion

b

Suppose that the CPI in 2013 was 250 and the CPI in 2014 was 260. What is the rate of inflation in this economy? a) 3.8% b) 4.0% c) 10.0% d) 96.2%

b

Label each description according to whether it is referring to nominal GDP or real GDP. A measure of an economy's output using current prices. a)Real GDP b)Nominal GDP A measure of an economy's output using constant prices. a)Real GDP b)Nominal GDP A measure of output that is adjusted for inflation. a)Nominal GDP b)Real GDP A measure of output that is not adjusted for inflation. a)Nominal GDP b)Real GDP

b, a, b, a

What is inflation? a)a decrease in the overall price level b)an increase in the amount of money in circulation c)an increase in the overall price level d)an increase in the overall level of economic activity

c

Real GDP per capita is NOT an adequate measure of a)a country's average aggregate output per person. b)average real GDP per person in the economy. c)a country's average aggregate spending per person. d)the well-being of each person in an economy.

d