Econ last exam quiz 3

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inflation equation

(new-old)/old X 10

nominal GDP equation

(price X quantity) + (Pirce X quantity)

CPI equation

(price of the basket in current year)/(price of basket in base year) X 100

A United States-based company in New York City opens a plant in Viet Nam that produces all of their good.

not included

A businessman in Los Angeles decides to invest more assets into technological stocks.

not included

A local gamer buys a new steady state hard drive from Japan.

not included

A local lawyer that usually makes $110/hour takes a pro bono case to help a struggling family in New Jersey.

not included

Samsung, a Korean company, produces their phones in Korea and ships them to the United States to be sold.

not included

real GDP fixes what

quantity of the base year

Which of the following is a better indicator of economic well-being?

real GDP

The consumer price index (CPI) measures approximately the same economic phenomenon as

te GDP deflator

A family pays a contractor $100,000 for a house he built for them this year.

Investment spending

Which of the following actions by the Fed would reduce the money supply

An increase in the interest rate paid on reserves

which of the following does NOT add to U.S. GDP? Air France buys a plane from Boeing, the U.S. aircraft manufacturer. b. General Motors builds a new auto factory in North Carolina. c. The city of New York pays a salary to a policeman. d. The federal government sends a Social Security check to your grandmother.

D. The federal government sends a Social Security check to your grandmother.

An accountant pays a tailor $175 to sew a suit for her.

consumption spending

You spend $7.00 to attend a movie.

consumption spending

You pay $300 a month to rent an apartment.

consumption spending or investment spending

GDP is the market value of all final intermediate goods produced within the United States during a given time period true or false

false

The government increases its defense expenditures by $1,000,000,000.

government spending

GDP is an imperfect measure of a country's well-being because it does not capture

how much leisure time a country takes

20,000 textbooks are sold to schools in Germany by a U.S. textbook company.

included

A local consulting firm decides to invest in the construction of a new office space.

included

A stay at home mom in Montana starts babysitting for the local community and gets paid.

included

The U.S. Congress signs a bill funding the creation of 1,000 new federal job positions.

included

At the end of the year, a flour-milling firm finds that its inventories of grain and flour are $10,000 above the amounts of its inventories at the beginning of the year.

investment spending

Ford Motors Co. buys new auto-making robots.

investment spending

purchasing power risen how do you find it

just minus the two percents

The money supply includes all of the following EXCEPT

metal coins

indexation equation

money in old year X (new year CPI)/ CPI in old year

Arkansans sell $1,000,000 worth of rice to China.

next exports

GDP deflator equation

nominal/ral X 100

You buy General Motors Corp. stock for $1,000 in the stock market.

not coined in GDP

A family pays $75,000 for a house he built three years ago.

not counted in GDP

Hyundai sells $5,000,000 worth of sedans in Seoul, South Korea.

not counted in GDP

The government makes a $300 Social Security payment to a retired person.

not counted in GDP

A homemaker works hard caring for her spouse and two children.

not counted in GdP

A U.S. shoe company produces shoes in China that are then sold in the United States

not included


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