econ chp. 7

(Table: Price and Output Data) Look at the table Price and Output Data. Between years 2 and 3, nominal GDP increased by:

33%.

Aggregate output is the total quantity of final goods and services produced.

true

A laptop computer that is purchased by an accounting firm is considered to be:

investment spending

When a firm buys a new machine for its business, it is considered to be:

investment spending

Chained dollars

is a method for calculating changes in real GDP using an early base year and a late base year

Inventory is counted as investment because:

it is a source of future sales.

Which of the following is an example of an intermediate good?

tires General Motors purchased from Goodyear for new electric cars

Assume that in the base year (2011), a country's nominal GDP is $10,000 billion. The country has had 5% inflation each year since 2006. Real GDP of 2011 is equal to:

$10,000 billion

(Table: Real and Nominal Output) Look at the table Real and Nominal Output. Nominal output in year 3 is:

$100 (units of output x price per unit)

(Table: Pizza Economy II) Look at the table Pizza Economy II. GDP in this economy is

$16,000 (value of sales-cost of intermediate sales=value added per firm, then add all values added per firm to get GDP)

(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. What is GDP in this economy?

$500

Spending on inputs is _____ of GDP, and investment spending is _____ of GDP.

not a part; part

Double counting would occur if:

used goods were included in the GDP calculation

(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. The growth of nominal GDP from 2013 to 2014 was due to approximately a _____ increase in prices and approximately a _____ increase in aggregate output.

%6.25, %5

(Table: Pizza Economy III) Look at the table Pizza Economy III. Considering 2010 as the base year, real GDP between 2010 and 2011 grew at a rate of:

-39.47%

(Table: Market Basket of School Supplies) Look at the table market Basket of School Supplies. It shows the prices of three common school supplies in 2010 and 2011 and the quantities of each school supply that consumers bought in 2010, the base year. A school supply index to measure the rate at which average school supply prices have changed would show an inflation rate of:

22%

If the consumer price index is 120 in year 1 and 150 in year 2, then the rate of inflation from year 1 to year 2 is:

25% (inflation rate= price index in year 2 - price index in year 1/ price index in year 1 x 100)

Assume that the consumer price index for 2009 was 103.9 and for 2010 was 107.6. What was the inflation rate between the two years?

3.56%

(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. Assuming that 2014 was the base year, the growth rate of real GDP from 2013 to 2014 was:

4.7%(?) NOTE: ( Increase = New Number - Original Number, then % increase = Increase ÷ Original Number × 100.) NOTE: (Decrease = Original Number - New Number, then % Decrease = Decrease ÷ Original Number × 100)

Which one of the following transactions is included in a current year's GDP as investment spending?

Maggie bought a play-gym set for her day-care business.

(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) and there is a decrease in investment spending, which of the following is likely to happen?

an increase in the unemployment rate

Goods that are produced in a particular period but not sold in that period:

are included in investment

The national accounts keep track of everything EXCEPT:

exchange rates

Which of the following is included in the calculation of GDP?

expenditure on new construction

Aggregate output is the sum of consumer spending on goods and services and investment spending by firms

false(aggregate output: the total quantity of final goods and services the economy produces for a given time period, usually a year)

(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. Which of the following is a type of market?

financial

(Scenario: Good A and Good B) Look at the Scenario Good A and Good B. In 2010, nominal GDP was _____ nominal GDP in _____.

greater than; 2009

In the factor markets:

households supply resources

Payments to Social Security recipients are indexed to the rate of inflation, as measured by the consumer price index. This means that when the rate of inflation increases, the _____ Social Security recipients _____.

payments to; increase

Which of the following is a measure of changes in the cost of a market basket of raw commodities, such as steel, electricity, and coal?

producer price index

(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. How does the government finance its spending?

taxes of $150 plus borrowing of $70

Which of the following is included in GDP?

the purchase of a ticket to a Lady Gaga concert

The GDP deflator for a given year is equal to 100 times nominal GDP for that year divided by real GDP for that year expressed in prices of a selected base year

true

The consumer price index measures the cost of the consumption of a family of four living in a typical U.S. city.

true

When Disney builds a new amusement park in the United States, it is counted as part of GDP.

true

(Table: Price and Output Data) Look at the table Price and Output Data. The value of year 3's output in nominal dollars is:

$20

(Table: Lemonade and Cookies) Look at the table Lemonade and Cookies. Assume that an economy produces only lemonade and cookies. Nominal GDP in 2014 was:

$445

(Table: Pizza Economy III) Look at the table Pizza Economy III. Considering 2010 as the base year, nominal GDP in 2011 was

$47,000(units of output x price per unit)

(Table: Per Capita GDP) Look at the table Per Capita GDP. Per capita real GDP in 2011 was:

$600 (GDP per capita= GDP/size of population)

(Table: Pizza Economy I) Look at the table Pizza Economy 1. GDP in this economy is:

$65000(add up total value of all final goods and services produced)