macro econ ch questions

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If the total adult working age population of the U.S. is 350 million, the number of unemployed people is 20 million, and the number of employed people is 170 million, what is the labor force participation rate? (round your answer to the nearest 10th)

(170 + 20)/ 350 (millions)= 0.5429 times = 54.30%

The fictitious country Xorba is going through hyperinflation. The table below shows what Xorba residents spent on a basket of goods and services at the end of three consecutive years. Use this information to calculate the inflation rate since the previous year for 2013 and 2014, and enter your answers in that order. (Round each answer to two decimal places.)

2013 = 277.29 2014 = 901.72 (Expenditure in new year - Expenditure in previous year)/Expenditure in previous year×100=Inflation rate

Edna is living in a retirement home where most of her needs are taken care of, but she has some discretionary spending. Based on the basket of goods in the table below, what is the cost of Edna's basket of goods in Time 1?

2120 Cost of a basket =P1∗Q1+P2∗Q2+ ... time 1 total cost added up

Which of the following are examples of defined contribution plans?

401(k)s 403(b)s

The table below shows hypothetical market baskets of goods and services for 3 friends. Calculate the cost of each person's market basket to determine the cost of the most expensive market basket. (Round to two decimal places.)

49.07

84.6

Using the information below, determine what percentage of total GDP for this country consists of durable goods. If necessary, round your answer to the nearest tenth.

GDP=Durable goods+Nondurable goods+Services+Structures+Change in inventories For this economy, GDP=2.9+2.5+11.4+2.1+0.4=$19.3 trillion To find the percentage of durable goods, 2.919.3×100=15.0%

Using the information below, determine what percentage of total GDP for this country consists of services. Round your answer to the nearest tenth.

GDP=Durable goods+Nondurable goods+Services+Structures+Change in inventories For this economy, GDP=2.98+2.51+10.98+1.92+0.10=$18.49 trillion To find the percentage of services, 10.9818.49×100=59.4%

Calculate total GDP for this economy given the following components of supply. Round your answer to the nearest tenth.

GDP=Durable goods+Nondurable goods+Services+Structures+Change in inventories For this economy, GDP=3.2+2.8+11.3+1.9+0=$19.2 trillion

All of the following statements are true, except: A firm can make money from inflation by paying bills and wages as late as possible so that it can pay in inflated dollars, while collecting revenues as soon as possible. If a firm is currently holding a lot of assets in cash, it would benefit from inflation An economy with high inflation rewards businesses that have found clever ways of profiting from inflation. In the short term, low or moderate levels of inflation may not pose an overwhelming difficulty for business planning.

If a firm is currently holding a lot of assets in cash, it would benefit from inflation If inflation declines more than anticipated, the purchasing power of cash increases. Therefore, in this case, the firm would benefit from increases in purchasing power.

Which of the following is true about the short-run aggregate supply curve

It is upward sloping

Why do economists care about recessions?

Many people lose work and struggle to support themselves financially. Economists care about recessions because during these periods many people lose work and struggle to support themselves financially. Even those who do not lose work may see cuts in hours or pay, which lowers their standard of living.

Charles volunteers at a local soup kitchen for approximately 15 hours per week. He is currently not seeking paid work. Is Charles considered unemployed?

If nominal GDP increases by 6% to $15,000, and the price level increases from 145 to 150, what is the current level of real GDP? If necessary, round your answer to the nearest hundredth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP =$15,000150/100 Real GDP =$15,0001.5=$10,000

Suppose input prices throughout the economy increase, pushing the price level up from 103 to 105 while nominal GDP increases from $76,000 to $80,000. What was the real GDP before the increase in input prices? Round your answer to the nearest hundredth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP =$76,000/ 103/100 Real GDP =$76,000/1.03=$73,786.41

Which of the following graphs most likely illustrates the aggregate supply curve in it's intermediate range

Right slant

Which of the following best describes the U.S. inflation rate since the base year of the Consumer Price Index?

U.S. price levels have seen periods of inflation and deflation.

If someone retires with a pension, what effect does inflation have on their income?

they will lose buying power because their income will not be worth as much

The Consumer Price Index (CPI) is a weighted average of the prices of all goods and services that are available in the U.S. economy.

false

The goals of macroeconomic policy include low rates of inflation, lower unemployment, and perfect competition in markets.

false

During the Great Depression, the U.S. economy experienced _________________.

severe deflation

According to Say's law Select the correct answer below: the demand curve is positively sloped. supply and demand are unrelated supply creates its own demand. the supply curve is negatively sloped.

supply creates its own demand.

Consider a family who borrows $250,000 to purchase a new home at a fixed interest rate of 8.5%. If inflation increases from 4% to 5.5%, how will this impact the real interest rate the family will be paying?

the home loan must be repaid at a real interest rate of 8.5%−5.5%=3%).

Using the table below, calculate the GDP per Capita for Country D. If necessary, round your answer to the nearest whole dollar. GDP per CapitaCountry Real GDP (in billions of U.S. dollars) - Population (in millions) - GDP per Capita (in U.S. dollars) A = $1,240 | 310 | ? B = $1,695 | 595 | ? C = $3,570 | 1,025 | ? D = $35,700 | 1,020 | ?

$35,000 A country's GDP per capita is calculated by dividing the GDP by the population: GDPpercapita=GDPpopulation We obtain GDP per capita in two steps: First, by multiplying column two (GDP, in billions of dollars) by 1000 so it has the same units as column three (population, in millions). Then divide the result (GDP in millions of dollars) by column three (population, in millions). The results for each country are shown in column four.

If the GDP per capita for Country T is $45,020 and the population is 153 people, what is the real GDP for Country T?

$6,888,060

If the GDP deflator increases from 105 to 120 while nominal GDP increases from $26,000 to $30,000, what is the new level of real GDP? If necessary, round your answer to the nearest hundredth.

$\$25,000$$25,000 To calculate real GDP, use the formula: Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP =$30,000120/100 Real GDP =$30,0001.2=$25,000

The table below shows the total spending on a basket of goods and services; use this information to calculate the index number for the cost of a basket of goods and services in period 1, assuming Period 2 is the base year. (Round to 1 decimal place.)

106.8 1560/14.6

Suppose an increase in productivity increases nominal GDP by 8% and inflation is −3%. (i.e. deflation). What is the real GDP growth rate?

11%

Weston Bank would like to provide a loan to Aaron. Suppose the inflation rate is predicted to be 8%. In order for the bank to protect the real value of the loan repayments they will receive, it should set loan's interest rate to:

11% 11 higher than 8

119.4

A strong world economy pushes Singapore's currency the Singapore dollar (SGD) to a record high of 1.15 SGD=$1. The GDP of Singapore also increases by 10,000 SGD to 190,000 SGD. What is Singapores GDP when measured in USD? Round your answer to the nearest hundredth.

165,217.39

Suppose the GDP of Canada is 250,000 CAD and the exchange rate between CAD and USD is 1.3 CAD=$1. What is the GDP of Canada when measured in USD? Round your answer to the nearest hundredth.

192,307.69

Using the table below, determine the growth in nominal GDP from 1980 to 1990.q

1990 nominal GDP - 1980 nominal GDP1980 nominal GDP×100=% change 1,150−1,2501,250×100=−8%

All of the following statements about the comparison of unemployment rates between low-income countries and high-income countries are true, except:

Comparing unemployment rates between high-income countries and low-income countries is fairly straightforward due to global economic records.

All of the following statements are true, except: Many countries in Latin America experienced raging inflation during the 1980s and early 1990s. Certain countries in Africa experienced extremely high rates of inflation in the 1990s. Countries with controlled economies in the 1970s, like the Soviet Union and China, historically had very high rates of measured inflation during this period. In the early 2000s, the problem of inflation appears to have diminished for most countries.

Countries with controlled economies in the 1970s, like the Soviet Union and China, historically had very high rates of measured inflation during this period.

Which of the following is true about deflation? Deflation occurs when the inflation rate increases at a decreasing rate. Deflation occurs when the inflation rate becomes negative. Deflation occurs when the price level falls. Deflation can be defined as a negative price level.

Deflation occurs when the inflation rate becomes negative.

Which of the following statements is true? All companies can afford to provide of cost of living adjustments to their employees. Lenders only provide loans that adjust automatically with inflation. Social Security benefits are not protected against inflation. During inflationary periods, some politicians could becomes less opposed to indexing.

During inflationary periods, some politicians could becomes less opposed to indexing.

True or False: Say's law implies that in the long run there will be overproduction or underproduction of goods.

False

GDP=Consumption+Investment+Government spending+Trade balance GDP=C+I+G+(X-M)

If total GDP for this economy is $14.61 trillion for the year shown in the table below, what was the total amount of government spending? Round your answer to the nearest hundredth.

GDP=Consumption+Investment+Government spending+Trade balance GDP=C+I+G+(X−M) G=GDP−C−I−(X−M) For this economy, Government spending=14.61−8.91−2.99−(3.82−3.64)=$2.53 trillion

If total GDP for this economy is $19.7 trillion for the year shown in the table below, what was the total amount spent on consumption? Round your answer to the nearest tenth.

GDP=Consumption+Investment+Government spending+Trade balance GDP=C+I+G+(X−M) For this economy, Consumption=19.7−3.6−4.0−(3.7−3.5)=$11.9 trillion

Calculate total GDP for this economy given the following components of demand. Round your answer to the nearest tenth.

GDP=Consumption+Investment+Government spending+Trade balance GDP=C+I+G+(X−M) For this economy, GDP=11.2+2.8+3.1+(2.4−2.3)=$17.2 trillion

Consider a situation where a country's GDP is rising. Which of the following scenarios, if true, would overstate the degree of change in the broad standard of living?

The environment becomes dirtier. It is theoretically possible that while GDP is rising, the standard of living could be falling if human health, environmental cleanliness, and other factors that are not included in GDP are worsening. A dirtier environment would reduce the broad standard of living, but would not be counted in GDP. Therefore, a rise in GDP would likely overstate improvements in standard of living.

All of the following statements are true, except: The incentives in the economy to adjust in response to changes in prices are stronger in periods of high and variable inflation than in periods of low inflation. High and variable inflation will lead to markets adjusting toward their equilibrium prices and quantities more erratically and slowly. Many individual markets will experience a greater chance of surpluses and shortages in an economy with high and variable inflation. Inflation can blur messages about the conditions of demand and supply in a market economy.

The incentives in the economy to adjust in response to changes in prices are stronger in periods of high and variable inflation than in periods of low inflation.

John borrows $50,000 from Bank of Xurbia at a fixed interest rate of 5%. If inflation is 5% at the time the loan is made, then:

The real interest rate on the loan is zero.

All of the following statements about the US unemployment rate by gender, race, and ethnicity are true, except: During the 2008-2009 recession and in the immediate aftermath, the unemployment rate for men exceeded the unemployment rate for women. The unemployment rate for African-Americans is slightly lower than the rate for other racial or ethnic groups. Unemployment rates for African-Americans and Hispanics were at the lowest levels for several decades until the mid-2000s before rising during the recent Great Recession. Before 1980 the unemployment rate for women was higher than that for men.

The unemployment rate for African-Americans is slightly lower than the rate for other racial or ethnic groups.

The inflation rate captures year-on-year price level differences. If in 2006 the inflation rate was 5% and in 2005 the inflation rate was 6%, this implies that

between 2005 and 2006, the price level rose at a slower rate

The table below shows the total expenditure on a basket of goods and services; use this information to calculate the index number for the cost of a basket of goods and services in periods 1, 2 and 4, assuming Period 3 is the base year. Write the index numbers in order from Period 1 to Period 4. (Round to 1 decimal place. Include the index number for period 3 in your answer.)

all spaces are empty. answering all 4 90.5 95.3 100 105.3

A movement along the AD curve up and to the left is caused by

an increase in the price level

Which of the following best describes hyperinflation? an outburst of high inflation a slow and steady increase of inflation an outburst of deflation a slow and steady decline of inflation

an outburst of high inflation

Which component of GDP accounts for the greatest percentage of total GDP?

consumption Consumption expenditure by households is the largest component of GDP. It accounts for about two-thirds in any given year and tells us that consumers' spending decisions are a major driver of the economy.

Hyperinflation often occurs when economies shift from a(n) ________________ economy to a ___________________ economy.

controlled; market-oriented

The inflation rate is most commonly derived from which of the following macroeconomics measures

cpi

Which of the following terms describes the estimate of dollar value loss of a capital good due to obsolescence or wear and tear over a period of time?

depreciation Depreciation is an estimate of the loss of the dollar value of a capital good over time. This depreciation may be due to obsolescence or general wear and tear. This concept allows firms to treat depreciation as an expense on their taxes just as they do labor costs or raw materials costs.

A(n) ______ is an especially lengthy period, where real GDP experiences a severe drop.

depression We call a decline in real GDP that typically lasts at least two consecutive quarters a recession. We call an especially lengthy and deep recession a depression. The severe drop in GDP that occurred during the 1930s Great Depression is clearly visible in the figure, as is the 2008-2009 Great Recession.

Which of the following have traditionally involved setting a fixed nominal dollar amount per year at retirement?

pensions

Using the table below, determine the growth in nominal GDP from 1980 to 1990. Round your answer to the nearest whole percent.

1990 nominal GDP - 1980 nominal GDP1980 nominal GDP×100=% change 1,850−1,7501,750×100=6%

The table below shows the index numbers for the cost of a basket of goods and services in four periods. Use this information to calculate the inflation rate for Period 4. (Round your answer to two decimals.)

2.14

Using the table below, determine the growth in nominal GDP from 1980 to 2000.

2000 nominal GDP - 1980 nominal GDP1980 nominal GDP×100=% change 1,500−1,250/1250×100=20%

Which of the following statements is not always true?

A rise in GDP is representative of economic progress. In certain cases, it is not clear that a rise in GDP is a good thing. If a city is wrecked by a hurricane, and then the city experiences a surge of rebuilding construction activity, it would be peculiar to claim that the hurricane was therefore economically beneficial. If people are led by a rising fear of crime to pay for installation of bars and burglar alarms on all their windows, it is hard to believe that this increase in GDP has made them better off. In that same vein, some people would argue that sales of certain goods, like pornography or extremely violent movies, do not represent a gain to society's standard of living.

Nominal GDP recently decreased by 2% following contractionary fiscal policy. Meanwhile, the price level decreased by 7%. What is the real GDP growth rate during this period? Round your answer to two decimal places.

% change in Quantity =% change in Nominal −% change in Price Therefore, real GDP growth rate (% change in quantity) approximately equals the growth rate in nominal GDP (% change in value) minus the inflation rate (% change in price). % change in Quantity =−2%−(−7%)=5%

A rise in oil prices has caused input prices to increase throughout the economy, causing nominal GDP to increase by 13%. Meanwhile, the price level decreases by 2%. What is the real GDP growth rate during this period?

% change in Quantity =% change in Nominal −% change in Price Therefore, real GDP growth rate (% change in quantity) equals the growth rate in nominal GDP (% change in value) minus the inflation rate (% change in price). % change in Quantity =13%−(−2%)=15%

An increase in population has increased aggregate demand within an economy, causing both output and prices to increase. Economists have estimated that this change has increased nominal GDP by 14% and the price level by 7%. What is the real GDP growth rate for this period?

Suppose the GDP of Britain is 15,000 pounds and the exchange rate between pounds and USD is 0.75 pounds=$1. What is the GDP of Britain when measured in USD?

Britain's GDP in USD=Britain's GDP in poundsExchange rate (pounds/USD)=15,000/ (0.75 pounds/1 USD)=$20,000

Which of the following equations is used to find the trade balance? Assume that both Imports and Exports are represented as positive numbers.

Exports - Imports The gap between imports and exports is called the trade balance, which is found by subtracting imports from exports.

Calculate total GDP for this economy given the following components of demand. Round your answer to the nearest tenth.

GDP=Consumption+Investment+Government spending+Trade balance GDP=C+I+G+(X−M) For this economy, GDP=11.4+2.8+3.0+(2.5−1.2)=$18.5 trillion

If total GDP for this economy is $18.6 trillion for the year shown in the table below, what was the total amount of government spending? Round your answer to the nearest tenth.

GDP=Consumption+Investment+Government spending+Trade balance GDP=C+I+G+(X−M) For this economy, Government spending=18.6−11.8−3.6−(3.7−2.9)=$2.4 trillion

The table below shows the index numbers for the cost of a basket of goods and services in each period. Use this information to calculate the inflation rate since the previous period. Enter the answers in order starting with Period 2. (Round to two decimals.)

25 4 3.08

Suppose a market basket contains two goods: good A and good B. Use the table below to calculate the cost of the market basket in 2010.

3630 ($33∗100)+($15∗22)=$3630 Cost of a basket of two goods is = P1∗Q1+P2∗Q2

Which of the following is true about the Producer Price Index?

It can be used to determine if there is a deflation in the prices of inputs used for production.

Which of the following is true about the Employment Cost Index?

It can be used to measure of wage inflation in the labor market.

Nominal GDP in 1990 was $40,000, and in 2000 it was $35,000. The GDP deflator was 102 in 1990, and in 2000 it was 95. What was real GDP in 1990? Round your answer to the nearest hundredth.

To calculate real GDP, use the formula: Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP in 1990 =$40,000102/100 Real GDP in 1990 =$40,0001.02=$39,215.69

Which of the following examples would support the goals of macroeconomic policy?

a policy that reduces payroll taxes with the intention of creating jobs an increase in government spending with the intention of stimulating economic growth an increase in money supply, which results in a lower interest rate all of the above The three goals of macroeconomic policy are economic growth, lower unemployment rates, and lower inflation rates. All of these examples support the goals of macroeconomic policy.

The GDP deflator is ______________.

a price index measuring the average prices of all goods and services The GDP deflator is a price index measuring the average prices of all goods and services included in the economy.

GDP is the most often-used measure to assess which of the following?

the size of a nation's overall economy

A purpose of the Core Inflation Index is _______________.

to be a gauge from which to make important government policy changes

Which of the following is not a component of demand used to measure GDP?

income taxes

Deflation is a time when the buying power of money in terms of goods and services _____________.

increases

A peak _______.

is the highest point in an economy that comes just before real GDP begins falling and recession begins A peak is the highest point in an economy that comes just before real GDP begins to fall and recession begins.

Following an increase in expansionary monetary policy, nominal GDP increased by 16% and inflation is 17%. What is the real GDP growth rate?

Suppose that an economy experienced a natural disaster that declined its nominal GDP by 5%. Meanwhile, inflation was 5%. What is the real GDP growth rate for this period?

Using the table below, determine the growth in real GDP from 1960 to 1990. Round your answer to the nearest whole percent.

1990 real GDP - 1960 real GDP1960 real GDP×100=% change 8,225−2,859.52,859.5×100=188%

The table below shows the total expenditure on a basket of goods and services for six consecutive years. Use this information to calculate the inflation rate since the previous year for 2004 and 2005, and enter your answers in that order. (Round each answer to two decimal places.)

2004 - 26.87 2005 - 24.24 (Expenditure in new year - Expenditure in previous year)/ Expenditure in previous year×100=Inflation rate

Using the table below, determine the growth in real GDP from 1975 to 2005. Round your answer to the nearest whole percent.

2005 real GDP - 1975 real GDP1975 real GDP×100=% change 13,095.4−4,952.8/4,952.8×100=164%

Using the table below, determine the growth in real GDP from 1990 to 2005. Round your answer to the nearest whole percent.

2005 real GDP - 1990 real GDP1990 real GDP×100=% change 13,095.4−8,225/ 8,225×100=59.24 -> 59%

Real GDP increases from $22,000 to $34,000 due to an increase in government expenditures on military projects. What is the percent change in real GDP? Round your answer to the nearest hundredth.

54.55%To find the real growth rate, we apply the formula for percentage change:New GDP - Old GDPOld GDP×100=% changeIn this case, real GDP increased, so the percent change is positive,34,000-22,00022,000×100=54.55%

Pizza Inc. is calculating its annual cost of raw pizza materials and comparing the prices for the last 3 years to determine if they should raise their price per pizza which they have not done since 2016. Using the table below determine what is the cost of the 2018 "basket" of pizza supplies.

89500 Cost of a basket =P1∗Q1+P2∗Q2+ ...

The table below shows the total expenditure on a basket of goods and services; use this information to calculate the index number for the cost of a basket of goods and services in periods 1 and 3, assuming Period 2 is the base year. Write the index numbers in order from Period 1 to Period 3. (Round to 1 decimal place.)

98.8 100 102.9

Which of the following statements about the business cycle are true?

A business cycle shows contractions and expansions of the economy. Economists use business cycles to track real GDP over a number of years. The business cycle shows movements in real GDP. Economists have sought for centuries to explain the forces at work in the business cycle. Not only are the currents that move the economy up or down intellectually fascinating, but also an understanding of them is of tremendous practical importance.

Which of the following statements is true? Countries with controlled economies have historically had low inflation rates. Countries with controlled economies have an abundance of goods. Countries with controlled economies allow citizens to influence price. Countries with controlled economies have little government intervention.

Countries with controlled economies have historically had low inflation rates.

Suppose the GDP of the entire European Union is 250,000 euros and the exchange rate between euros and USD is 0.86 euros=$1. What is the GDP of the European Union when measured in USD? Round your answer to the nearest hundredth.

EU's GDP in USD=EU's GDP in eurosExchange rate (euro/USD)=250,000/ (0.86 euros/1 USD)=$290,697.67

What is always true in a period of trade surplus?

Exports exceed imports. By definition, a trade surplus occurs when the dollar value of exports is greater than the dollar value of imports.

As an economic measurement tool, gross national product (GNP) is a measurement of what is produced domestically within a year accounting for depreciation.

False Gross national product (GNP) is a measurement of what is produced by domestic factors of production, regardless of where production takes place.

GDP is the current value of all final goods and services produced in a nation in a year. What are final goods?

Final goods are goods at the furthest stage of production at the end of a year. Government statisticians count just the value of final goods and services in the chain of production that are sold for consumption, investment, government, and trade purposes. Statisticians exclude intermediate intermediate goods (goods that go into producing other goods) from GDP calculations.

If total GDP for this economy is $16.33 trillion for the year shown in the table below, what was the country's trade balance? Round your answer to the nearest hundredth.

GDP=Consumption+Investment+Government spending+Trade balance Trade balance=(Exports−Imports)=(X−M) For this economy, Trade balance=16.33−9.91−2.76−3.18=$0.48 trillion Since the trade balance for this economy is positive, this country is facing a trade surplus.

If total GDP for this economy is $18.10 trillion for the year shown in the table below, what was the country's trade balance? Round your answer to the nearest hundredth if necessary.

GDP=Consumption+Investment+Government spending+Trade balance Trade balance=(Exports−Imports)=(X−M) For this economy, Trade balance=18.10−12.13−2.82−3.15=$0 trillion Since the trade balance for this economy is zero, this country is facing balanced trade.

According to the data set below, what was the GDP per capita in the United States in 2013? Round your answer to the nearest whole dollar.

GDPpercapita=GDPpopulation For the United States in 2013, it is $16,691,500,000,000316/234,505=$52,782

Which of the following is the best reason why the arrival of new goods creates problems with respect to the accuracy of measuring inflation?

If the price index leaves out new goods, it overlooks one of the ways in which the cost of living is improving.

Which of the following statements is true? If the price level (as measured by the CPI) increases, a borrower with an adjustable rate mortgage (ARM) will receive a lower interest rate. If the price level (as measured by the CPI) increases, a borrower with an adjustable rate mortgage (ARM) will receive a higher interest rate. If the price level (as measured by the CPI) increases, a borrower with a fixed-rate mortgage will receive a lower interest rate. If the price level (as measured by the CPI) increases, a borrower with a fixed-rate mortgage will receive a higher interest rate.

If the price level (as measured by the CPI) increases, a borrower with an adjustable rate mortgage (ARM) will receive a higher interest rate.

All of the following statements are true, except: If inflation varies substantially over the short or medium term, then it may make sense for businesses to stick to shorter-term strategies. In recent decades in the U.S., rising inflation rates have at times been closely followed by lower inflation rates. In recent decades in the U.S, rising inflation rates have always corresponded to increasing productivity rates. There is some evidence that if inflation can be held to moderate levels, it doesn't prevent a nation's real economy from growing at a healthy pace.

In recent decades in the U.S, rising inflation rates have always corresponded to increasing productivity rates.

Which of the following is true about core inflation?

It is a measure of inflation that excludes the rate of price increases for certain volatile components in price indexes.

If nominal GDP is $175,000 and the GDP deflator is 143, what is real GDP? Round your answer to the nearest hundredth.

Real GDP =Nominal GDPPrice Index/100 Real GDP =$175,000143/100 Real GDP =$175,0001.43=$122,377.62

Suppose that a hurricane destroys most of the capital stock within a country, causing nominal GDP to decrease by 20% to $12,500 while the price level tumbles to 105 from an original value of 150. What is the current real GDP? Round your answer to the nearest hundredth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP =$12,500105/100 Real GDP =$12,5001.05=$11,904.76

If the current price level is 175 and nominal GDP is $125,000, what is real GDP? Round your answer to the nearest hundredth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP =$125,000/ 175/100 Real GDP =$125,000/1.75=$71,428.57

Using the table below, calculate real GDP (in billions of dollars) in 2003. Round your answer to the nearest hundredth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP in 2003 =$9,890.9/ 87.6/100 Real GDP in 2003 =$9,890.9/0.876=$11,290.98

Using the table below, calculate real GDP (in billions of dollars) in 2004. Round your answer to the nearest tenth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP in 2004 =$10,302.9/ 94.5/100 Real GDP in 2004 =$10,302.9/0.945=$10,902.5

Using the table below, calculate real GDP (in billions of dollars) in 2004. Round your answer to the nearest tenth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP in 2004 =$10,502.994.5/100 Real GDP in 2004 =$10,502.90.945=$11,114.2

Using the table below, calculate real GDP (in billions of dollars) in 2006. Round your answer to the nearest tenth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP in 2006 =$11,430.8/ 106/100 Real GDP in 2006 =$11,430.8/1.06=$10,783.8

Using the table below, calculate real GDP (in billions of dollars) in 2014. Round your answer to the nearest tenth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP in 2014 =$17,522109.34/100 Real GDP in 2014 =$17,5221.0934=$16,025.2

Using the table below, calculate real GDP (in billions of dollars) in 2018. Round your answer to the nearest tenth.

Real GDP =Nominal GDPPrice Index/100 The GDP Deflator is also known as the price level, so Real GDP in 2018 =$19,960/ 114.90/100 Real GDP in 2018 =$19,9601.149=$17,371.6

An increase in capital stock causes productivity to increase which increases real GDP from $17,000 to $20,000. What is the percent change in real GDP? Round your answer to the nearest hundredth.

To find the real growth rate, we apply the formula for percentage change: New GDP - Old GDPOld GDP×100=% change In this case, real GDP increased, so the percent change is positive, 20,000-17,00017,000×100=17.65%

An earthquake destroys much of the capital stock within an economy, causing real GDP to decrease from $18,000 to $12,000. What is the percent change in real GDP?

To find the real growth rate, we apply the formula for percentage change: New GDP-Old GDPOld GDP×100=% change In this case, real GDP decreased, so the percent change is negative, 12,000-18,00018,000×100=−33.3%

A change in relative prices between two counties has caused net exports to increase, resulting in real GDP increasing from $12,000 to $15,000. What is the percent change in real GDP? If necessary, round your answer to the nearest tenth.

To find the real growth rate, we apply the formula for percentage change: New GDP-Old GDPOld GDP×100=% change In this case, real GDP increased, so 15,000-12,00012,000×100=25%

If the GDP per capita for Country J is $2,467 and the population is 360 people, what is the real GDP for Country J?

To solve for real GDP we can fill in the information from this problem into the GDP per capita formula. GDPpercapita=realGDPpopulation realGDP=GDPpercapita×population $2,467×360=$888,120

GDP can understate standard of living by ______________.

not capturing increases in leisure time In some ways, the rise in GDP understates the actual rise in the standard of living. For example, the typical workweek for a U.S. worker has fallen over the last century from about 60 hours per week to less than 40 hours per week. Life expectancy and health have risen dramatically, and so has the average level of education. Since 1970, the air and water in the United States have generally been getting cleaner. Companies have developed new technologies for entertainment, travel, information, and health. A much wider variety of basic products like food and clothing is available today than several decades ago. Because GDP does not capture leisure, health, a cleaner environment, the possibilities that new technology creates, or an increase in variety, the actual rise in the standard of living for Americans in recent decades has exceeded the rise in GDP.

Double counting is a potential mistake to be avoided in measuring GDP in which __________.

output is counted more than once as it travels through the stages of production Double counting is defined as a potential mistake to be avoided in measuring GDP in which output is counted more than once as it travels through the stages of production. Double counting results in significant overstatement of a nation's GDP since goods are counted more than once in the total figure.

If the price index leaves out new goods, it overlooks one of the ways in which the cost of living is improving and ______________ the true cost of living.

overstates

Which of the following does not reflect a goal of macroeconomic policy?

rapidly increase the overall level of prices The three goals of macroeconomic policy are economic growth, lower unemployment rates, and lower inflation rates. An increase in the overall level of prices would indicate that inflation is increasing, which is not a goal of macroeconomic policy.

Which term refers to the value of a good or service after adjusting for changes in inflation?`

real value The nominal value of any economic statistic means that we measure the statistic in terms of actual prices that exist at the time. The real value refers to the same statistic after it has been adjusted for inflation. Generally, it is the real value that is more important.

Which of the following best describes the real interest rate? the rate of interest after allowing for inflation the rate of inflation minus the nominal interest rate the nominal interest rate plus minimum wage the rate of inflation minus the minimum wage

the rate of interest after allowing for inflation

Which of the following descriptions best fits the term nominal value?

the value of a good or service actually announced at the time and not adjusted for inflation By definition, nominal value is the value of a good or service that is not adjusted for inflation. The nominal value of any economic statistic means that we measure the statistic in terms of actual prices that exist at the time.

Which of the following is the correct definition of real value?

the value of a good or service after adjusting for changes in inflation The definition of real value is the value of a good or service after adjusting for changes in inflation. Generally, the real value is a more important statistic than the nominal value since it tells us more about how to interpret the amount.

The gap between imports and exports is called the ___________.

trade balance

Which of the following best defines indexing? when wages are indexed by the interest rate when prices are automatically adjusted to match the interest rate when prices, wages, or the interest rate is adjusted automatically with inflation all of the above

when prices, wages, or the interest rate is adjusted automatically with inflation

If 1% of the population has 70% of the wealth, while the other 99% of the population has the remaining 30% of the wealth, GDP ____________________.

would not be able to show that disparity GDP can only account for production exchanged in the market, including the value of goods and services, spending, income, and inventories. It does not account for leisure time, worker inequality, quality of goods, unpaid work, wealth distribution, productivity, health, environmental cleanliness, learning, household production, illegal production, and available technology.

macro econ ch questions

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