Sapling Chp 7, 8, 10, 14

In Macroland, the GDP deflator for 2014 is 105 with 2013 as the base year. Real GDP in 2014 equaled $210 billion. Therefore, nominal GDP in 2014 equaled _____, while nominal GDP in 2013 equaled _____. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices $220.5 billion; $200 billion $220.5 billion; $210 billion $200 billion; $220.5 billion $200 billion; $210 billion

$220.5 billion; $200 billion 210x105%=220.5 The GDP deflator is 100 times the ratio of nominal to real GDP; the GDP deflator can also be used as a price index to calculate the rate of inflation.

GDP and the CPI: Tracking the Macroeconomy — Discovering Data The accompanying graph plots the four main components of annual Gross Domestic Product (GDP) for the United States of America as a percent of total GDP. c. In 2016, which component of GDP was the largest? In 2016, which component of GDP was the smallest? What was the last year in which net exports were positive?

-personal consumption expenditures -net exports of goods and services -1975

If C = $1,000, I = $500, G = $800, X = $400, and M = $600, what is the value of GDP? $2,300 $2,100 $2,500 $3,300

1000+500+800+(400-600)=2100

The table represents the cost of some fruits in the city of Seraph in 2013 and 2014. A market basket for constructing a price index consists of 200 oranges, 100 apples, and 100 bananas, and 2013 is the base year. The value of the price index in 2014 was: A table shows the price of oranges, apples, and bananas in the years 2013 and 2014. The data are as follows: Oranges, Price in 2013: 0.50 dollars; Price in 2014: 0.40 dollars. Apples, Price in 2013: 0.25 dollars; Price in 2014: 0.40 dollars. Bananas, Price in 2013: 0.40 dollars; Price in 2014: 0.50 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 97. 100. 103. 106.

103

The table represents data on the economy of Jonesville. Based on this table, the rate of inflation using the GDP deflator as the price index between 2013 and 2012 was approximately: A table shows the Nominal GDP, Real GDP, and GDP Deflator during the years 2012 to 2015. The data are as follows: Year: 2012, Nominal GDP: 99, Real GDP: Blank space, GDP Deflator: 90. Year: 2013, Nominal GDP: 120, Real GDP: Blank space, GDP Deflator: 100. Year: 2014, Nominal GDP: 132, Real GDP: Blank space, GDP Deflator: 110. Year: 2015, Nominal GDP: Blank space, Real GDP: 150, GDP Deflator: 94. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 5 percent. 7 percent. 9 percent. 11 percent.

11% To find the rate of inflation between two years, calculate the percentage change in the GDP deflator between these two years.

The table represents the economy of Thriftland. Based on this table, the value of real GDP in 2013 was: A table shows the Nominal GDP, Real GDP, and GDP Deflator during the years 2012 to 2015. The data are as follows: Year: 2012, Nominal GDP: 99, Real GDP: Blank space, GDP Deflator: 90. Year: 2013, Nominal GDP: 120, Real GDP: Blank space, GDP Deflator: 100. Year: 2014, Nominal GDP: 132, Real GDP: Blank space, GDP Deflator: 110. Year: 2015, Nominal GDP: Blank space, Real GDP: 150, GDP Deflator: 94. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 20. 83.3. 100. 120.

120 In the base year for the GDP deflator, the value of nominal GDP is equal to the value of real GDP.

The table represents the cost of a market basket of goods in the town of Yingledog for the years 2011, 2012, 2013, and 2014. If the base year is 2011, the price index for 2013 was: A table shows the following data: Year: 2011, Cost: 10,000. Year: 2012, Cost: 12,000. Year: 2013, Cost: 13,000. Year: 2014, Cost: 16,000. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 77. 83. 120. 130.

130

GDP and the CPI: Tracking the Macroeconomy — Discovering Data The accompanying graph plots annual Gross Domestic Product (GDP) for the United States of America. a. What was GDP in the United States in 2016? Round answer to three places after the decimal. $ billion

18624.475

Given the output and price data in the table, the growth in nominal GDP was equal to the growth in real GDP between years: A table shows price and output data for 5 years. The table shows 5 rows and 3 columns. The column headers are as follows: Year, Output, and Price per unit. The data read as follows: Year: 1 (base year); Output: 2; Price per unit: 1 dollar. Year: 2; Output: 4; Price per unit: 3 dollars. Year: 3; Output: 6; Price per unit: 3 dollars. Year: 4; Output: 6; Price per unit: 5 dollars. Year: 5; Output: 8; Price per unit: 7 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 1 and 2. 2 and 3. 3 and 4. 4 and 5.

2 and 3 prices were constant

A small economy only produces two goods: soda and pizza. This information is shown in the table. Based on the table, the growth rate of real GDP between 2010 and 2011 was _____ percent. A table shows the 2010 and 2011 prices and output for soda and pizza. The table shows 2 rows and 4 columns. The column headers are as follows: 2010 Output, 2010 Prices, 2011 Output, and 2011 Prices. The row headers are as follows: Soda and Pizza. The data read as follows: Soda, 2010 Output: 200 units; Soda, 2010 Prices: 1 dollar per unit. Soda, 2011 Output: 220 units; Soda, 2011 Prices: 1 dollar per unit. Pizza, 2010 Output: 50 units; Pizza, 2010 Prices: 10 per unit. Pizza, 2011 Output: 50 units; Pizza, 2011 Prices: 11 per unit. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 0.5 1.7 2.9 4.1

2.9

GDP and CPI Work It Out: Question 1 of 4 The economy of Britannica produces three goods: computers, Blu-rays, and pizza. The accompanying table shows the prices and output for the three goods in the years 2012, 2013, and 2014. Computers Blu-rays Pizzas Year Price Quantity Price Quantity Price Quantity 2012 $900 10 $10 100 $15 2 2013 1,000 10.5 12 105 16 2 2014 1,050 12 14 110 17 3 Calculate the percentage change in production for all three goods from 2012 to 2013. Round answers to two places after the decimal when applicable. Computers: % Blu-rays: % Pizzas: % Calculate the percentage change in production for all three goods from 2013 to 2014. Round answers to two places after the decimal when applicable. Computers: % Blu-rays: % Pizzas: %

2012 -2013 Computer = (10.5-10)/10 * 100 = 5% Blu Rays = (105-100)/100 * 100 = 5% Pizza = (2-2)/2 * 100 = 0% 2013 -2014 Computer = (12- 10.5)/10.5 * 100 = 14.29% Blu Rays = (110-105)/105 * 100 = 4.76% Pizza = (3-2)/2 * 100 = 50%

GDP and CPI Work It Out: Question 2 of 4 The economy of Britannica produces three goods: computers, Blu-rays, and pizza. The accompanying table shows the prices and output of the three goods for the years 2012, 2013, and 2014. Computers Blu-rays Pizzas Year Price Quantity Price Quantity Price Quantity 2012 $900 10 $10 100 $15 2 2013 1,000 10.5 12 105 16 2 2014 1,050 12 14 110 17 3 Calculate the percentage change in price for all three goods from 2012 to 2013. Round answers to two places after the decimal point when applicable. Computers: % Blu-rays: % Pizzas: % Calculate the percentage change in price for all three goods from 2013 to 2014. Round answers to two places after the decimal point when applicable. Copmuters: % Blu-rays: % Pizzas: %

2012 -2013 Computer = (1000- 900) * 100 / 900 = 11.11% Blu Rays = (12- 10) * 100 / 10 = 20% Pizza = (16- 15) * 100 / 15 = 6.67% 2013 -2014 Computer = (1050- 1000) * 100 / 1000 = 5% Blu Rays = (14- 12) * 100 / 12 = 16.67% Pizza = (17- 16) * 100 / 16 = 6.25%

A small economy produces three items: wheat, flour, and bread. Farmer Zack produces wheat and sells it to the Big Gluten Company. The Big Gluten Company produces flour and sells it to the Fragrant Bread Corporation. This information is shown in the table. The value added by Fragrant Bread is: A table shows 4 rows and 3 columns. The row headers are as follows: Intermediate goods, Wages, Profits, Value of output. The column headers are as follows: Farmer Zack, Big Gluten Company, Fragrant Bread Corporation. The data read as follows: Intermediate Goods: Farmer Zack, 0 dollars; Big Gluten Company, 40 dollars; Fragrant Bread Corporation, 110 dollars. Wages: Farmer Zack, 30 dollars; Big Gluten Company, 50 dollars; Fragrant Bread Corporation, 60 dollars. Profits: Farmer Zack, 10 dollars; Big Gluten Company, 20 dollars; Fragrant Bread Corporation, 40 dollars. Value of output: Farmer Zack, 40 dollars; Big Gluten Company, 110 dollars; Fragrant Bread Corporation, 210 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices $25. $50. $75. $100.

210-110=$100

The table represents the cost of some fruits in Smithtown in 2013 and 2014. A market basket for constructing a price index consists of 200 oranges, 100 apples, and 100 bananas. Based on this market basket, the rate of inflation between 2013 and 2014 in this economy was _____ percent. A table shows the price of oranges, apples, and bananas in the years 2013 and 2014. The data are as follows: Oranges, Price in 2013: 0.50 dollars; Price in 2014: 0.40 dollars. Apples, Price in 2013: 0.25 dollars; Price in 2014: 0.40 dollars. Bananas, Price in 2013: 0.40 dollars; Price in 2014: 0.50 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 0 3 67 103

3 The inflation rate is the percentage change per year in a price index-typically the consumer price index.

Given the output and price data in the table, real GDP did not change between years: A table shows price and output data for 5 years. The table shows 5 rows and 3 columns. The column headers are as follows: Year, Output, and Price per unit. The data read as follows: Year: 1 (base year); Output: 2; Price per unit: 1 dollar. Year: 2; Output: 4; Price per unit: 3 dollars. Year: 3; Output: 6; Price per unit: 3 dollars. Year: 4; Output: 6; Price per unit: 5 dollars. Year: 5; Output: 8; Price per unit: 7 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 1 and 2. 2 and 3. 3 and 4. 4 and 5.

3 and 4 Real GDP equals the output in the current year times the price level in the base year.

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%

4.0% (260/250) x 100=104-100=4%

Given the output and price data in the table, the growth rate of nominal GDP between years 3 and 4 is _____ percent. A table shows price and output data for 5 years. The table shows 5 rows and 3 columns. The column headers are as follows: Year, Output, and Price per unit. The data read as follows: Year: 1 (base year); Output: 2; Price per unit: 1 dollar. Year: 2; Output: 4; Price per unit: 3 dollars. Year: 3; Output: 6; Price per unit: 3 dollars. Year: 4; Output: 6; Price per unit: 5 dollars. Year: 5; Output: 8; Price per unit: 7 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 33 50 67 75

5/3 x 100=166.7-100=67%

GDP and the CPI: Tracking the Macroeconomy — Discovering Data The accompanying graph plots the four main components of annual Gross Domestic Product (GDP) for the United States of America as a percent of total GDP. e. Complete the following passage by correctly identifying the changes in the components of GDP since World War II. Since WWII consumption spending has increased to about of GDP in 2016. Government spending decreased from about of GDP at the height of the war to about of GDP in 2016. Investment spending has been . Starting in the late 70's net exports .

65% 50% 17% -relatively stable over the years -became persistantly negative

A small economy only produces two goods: soda and pizza. This information is shown in the table. Based on the table, if 2010 is the base year, real GDP in 2010 was $_____. A table shows the 2010 and 2011 prices and output for soda and pizza. The table shows 2 rows and 4 columns. The column headers are as follows: 2010 Output, 2010 Prices, 2011 Output, and 2011 Prices. The row headers are as follows: Soda and Pizza. The data read as follows: Soda, 2010 Output: 200 units; Soda, 2010 Prices: 1 dollar per unit. Soda, 2011 Output: 220 units; Soda, 2011 Prices: 1 dollar per unit. Pizza, 2010 Output: 50 units; Pizza, 2010 Prices: 10 per unit. Pizza, 2011 Output: 50 units; Pizza, 2011 Prices: 11 per unit. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 50 200 500 700

700

The table shows the quantities of food and clothes that make up a two-good market basket. The value of the market basket in 2014 was $_____. A table shows two types of goods, their market-based quantities, and their prices in the years 2014 and 2015. The data are as follows: Good: Food, Market-based quantity: 100 units; 2014 prices: 4 dollars; 2015 prices: 6 dollars. Good: Clothes, Market-based quantity: 50 units; 2014 prices: 10 dollars; 2015 prices: 12 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 50 400 500 900

900

The table represents data on the economy of the city-state of Hibiscus. Based on the table, the value of real GDP in 2012 was: A table shows the Nominal GDP, Real GDP, and GDP Deflator during the years 2012 to 2015. The data are as follows: Year: 2012, Nominal GDP: 99, Real GDP: Blank space, GDP Deflator: 90. Year: 2013, Nominal GDP: 120, Real GDP: Blank space, GDP Deflator: 100. Year: 2014, Nominal GDP: 132, Real GDP: Blank space, GDP Deflator: 110. Year: 2015, Nominal GDP: Blank space, Real GDP: 150, GDP Deflator: 94. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 89.1. 90.9. 110. 891.

99/90=1.1 and 1.1x100=110 Real GDP is equal to 100 times the ratio of nominal GDP to the GDP deflator.

BR7.1: Bridge: National Income Accounting

BR7.1: Bridge: National Income Accounting

Suppose Jollyland has a population of 1,000 people and its GDP is equal to $1 million, while Follyland has a population of 8,000 people and its GDP is equal to $8 million. Which country has a higher GDP per capita? Both countries have the same GDP per capita. Jollyland There is not enough information to determine GDP per capita. Follyland

Both countries have the same GDP per capita.

An economy has three firms: American Racquet Co., which produces tennis racquets; American Metal Co., which produces the various metals that go into racquet production; and American Ore Co., which mines the ores needed for the manufacture of the metal. This economy produces 100 racquets that sell for $50 each. There are no other goods produced in this economy. All the ore that is mined is sold to the metal company, and all the metal that is produced is sold to the racquet company. Based on the table, which entries would be combined to get a measure of gross domestic product (GDP) if the factor-payments approach is used? A table shows 4 rows with headers that read: American Racquet Co., American Metal Co., American Ore Co., and Total Factor Income. Eight columns are shown with headers that read: Value of Sales, Intermediate Goods, Wages, Interest Payments, Rent, Profit, Total Expenditures by Firm, and Value Added per Firm. The data are as follows: American Racquet Co., Value of Sales: 5,000 dollars, Intermediate Goods: A, Wages: 2,000 dollars, Interest payments: 100 dollars, Rent: 500 dollars, Profit: 200 dollars, Total Expenditures by Firm: 5,800 dollars, Value Added per Firm: G. American Metal Co., Value of Sales: 3,000 dollars, Intermediate Goods: B, Wages: 1,000 dollars, Interest Payments: 50 dollars, Rent: 100 dollars, Profit: 750 dollars, Total Expenditures by Firm: 2,400 dollars, Value Added per Firm: H. American Ore Co., Value of Sales: 500 dollars, Intermediate Goods: 0, Wages: 100 dollars, Interest Payments: 20 dollars, Rent: 50 dollars, Profit: 130 dollars, Total Expenditures by Firm: 300 dollars, Value Added per Firm: I. Total Factor Income, Value of Sales: Blank space, Intermediate Goods: Blank space, Wages: C, Interest Payments: D, Rent: F, Profit: Blank space, Total Expenditures by Firm: Blank space, Value Added per Firm: Blank space. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices C, D, E, and F A, B, C, and D G, H, and I A and B

C, D, E, and F

Country A sells $100 million worth of goods and services to Country B. Country B sells $50 million worth of goods and services to Country A. These are the only two countries in Macro World. Based on this data, net exports in: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices Country A equal $150 million. Country A equal -$50 million. Country B equal -$50 million. Country B equal $50 million.

Country B equal -$50 million.

DD7: Discovering Data - Ch. 7: GDP and CPI: Tracking the Macroeconomy

DD7: Discovering Data - Ch. 7: GDP and CPI: Tracking the Macroeconomy

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) $21 billion b) $19 billion c) $18 billion d) $17 billion

$19 billion

GDP and the CPI: Tracking the Macroeconomy - End of Chapter Problems 8. The accompanying table shows data on nominal GDP (in billions of dollars), real GDP (in billions of 2009 dollars), and population (in thousands) of the United States in 1965, 1975, 1985, 1995, 2005, 2015. The U.S. price level rose consistently over the period 1965-2015. c. Calculate real GDP per capita for the following years. Round answers to the nearest dollar. Real GDP per capita in 1985: $ Real GDP per capita in 1995: $ Real GDP per capita in 2005: $ Real GDP per capita in 2015: $ d. Calculate the percent change in real GDP per capita for the following years. Round answers to two places after the decimal. %Δ real GDP per capita for 1985-1995: % %Δ real GDP per capita for 2005-2015: % Which period had the highest growth rate? 1985-1995 2005-2015 e. How do the percent change in real GDP and the percent change in real GDP per capita compare? Which is larger? Do we expect them to have this relationship? The change in real GDP is larger because real GDP grew faster than the population. The change in real GDP is larger because changes in real GDP per capita are offset by the growing population.

Divide real GDP by the population to find real GDP per capita. Real GDP per capita in 1985: $31851 7593.8/238416*1000000=31851 Real GDP per capita in 1995: $38185 10174.8/266458*1000000=38185 Real GDP per capita in 2005: $49234 14234.2/289115*1000000=49234 Real GDP per capita in 2015: $50836 16348.9/321601*1000000=50836 %Δ real GDP per capita for 1985-1995: 38185-31851=6334 6334/31851*100=19.89% %Δ real GDP per capita for 2005-2015: 50836-49234=1602 1602/49234*100=3.25% highest growth rate=1985-1995 e. The change in real GDP is larger because changes in real GDP per capita are offset by the growing population.

EOC7: End of Chapter Problems - Ch. 7: GDP and CPI: Tracking the Macroeconomy

EOC7: End of Chapter Problems - Ch. 7: GDP and CPI: Tracking the Macroeconomy

Suppose that GDP is $50 million in 2015 but falls to $48 million in 2016, and that no changes in personal consumption expenditures, gross private domestic investment, and government spending are recorded. What must have happened to net exports to cause this change? From 2015 to 2016, both imports and exports must have fallen by $2 million. From 2015 to 2016, both imports and exports must have risen by $2 million. From 2015 to 2016, the difference between exports and imports must have risen by $2 million. From 2015 to 2016, the difference between exports and imports must have fallen by $2 million.

From 2015 to 2016, the difference between exports and imports must have fallen by $2 million.

Which formula represents the calculation of gross domestic product (GDP) as expenditures on final goods and services? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices GDP = wages + rent + interest payments + profit GDP = consumption + Investment + Government Purchases of Goods and Services + Exports - Imports GDP = value added by business + value added by households + value added by government + value added by the foreign sector GDP = value added by business + value added by households + value added by government

GDP = consumption + Investment + Government Purchases of Goods and Services + Exports - Imports

Suppose one has data for the following categories: net interest, government spending, corporate profits, net exports, gross private domestic investment, rental income, and personal consumption expenditures. Which measure of GDP can be calculated? There is not enough information to calculate GDP using either approach. GDP using both approaches. GDP using the income approach. GDP using the expenditures approach.

GDP using the expenditures approach.

GDP and the CPI: Tracking the Macroeconomy — Discovering Data The accompanying graph plots the four main components of annual Gross Domestic Product (GDP) for the United States of America as a percent of total GDP. d. Which of the following explains the drastic change in the composition of GDP in the 1940s? Government spending drastically increased in order to pay for the war effort in World War II. Personal consumption spending drastically decreased due to the Great Depression. Private investment spending drastically increased due to the quick recovery from the Great Depression. Personal consumption spending decreased due to higher taxes required to pay for World War II.

Government spending drastically increased in order to pay for the war effort in World War II.

_____ may be calculated by adding the value added by firms at each stage of production of the final good. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices Aggregate output Gross domestic product Final goods and services Aggregate spending

Gross domestic product

Which is true of the circular-flow diagram? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices The flow of money into the household sector does not include the value of government transfers. In the circular-flow diagram, the flows into each market or sector must equal the outflow coming from that market or sector. The flow of money into the household sector includes the value of all the final goods and services that households produce. The flow of money into the financial market does not include private savings.

In the circular-flow diagram, the flows into each market or sector must equal the outflow coming from that market or sector.

GDP and the CPI: Tracking the Macroeconomy — End of Chapter Problems 6. Which of the following transactions will be included in GDP for the United States? Included in U.S. GDP Not included in U.S. GDP Answer Bank

Included in U.S. GDP Coco Cola builds a new bottling plant A california winery produces a bottle of chardonnay A book publisher produces too many copies Not included in U.S. GDP Delta sells an airplane built several years ago Ms. Moneybags buys an existing share An American buys a bottle of French

LC7: Learning Curve

LC7: Learning Curve

GDP and CPI Work It Out: Question 2 of 4 The economy of Britannica produces three goods: computers, Blu-rays, and pizza. The accompanying table shows the prices and output of the three goods for the years 2012, 2013, and 2014. Computers Blu-rays Pizzas Year Price Quantity Price Quantity Price Quantity 2012 $900 10 $10 100 $15 2 2013 1,000 10.5 12 105 16 2 2014 1,050 12 14 110 17 3 Calculate nominal GDP

Nominal GDP = Q * P (of all products) of each year 2012 = 900 * 10 = 9000 (Computers) 100 * 10 = 1000 (Blu rays) 15 * 2 = 30 (Pizza) = 9000 + 1000 + 30 = 10030 NGDP for 2012 = $10030 2013 = 1000 * 10.50= 10500(Computers) 12 * 105 = 1260 (Blu rays) 16 * 2 = 32 (Pizza) = 10500 + 1260 + 32 = 11792 NGDP for 2013 = $11792 2014 = 1050 * 12 = 12600 (Computers) 14 * 110 = 1540 (Blu rays) 17 * 3 = 51 (Pizza) = 12600 + 1540 + 51 = 14191 NGDP for 2014 = $14191 Percent change in NGDP from 2012 to 2013 is [(11792-10030)/10030]*100=17.57% Percent change in NGDP from 2013 to 2014 is [(14191-11792)/11792]*100=20.34%

Which of the following characteristics about Econoville could be determined based on its GDP? The fact that there is virtually no pollution in Econoville. The fact that incomes are very equally distributed in Econoville. None of the above can be determined based on Econoville's GDP. The fact that there is no underground or informal markets in Econoville.

None of the above can be determined based on Econoville's GDP.

PCT7.1: Pre-Class Tutorial: National Income Accounting

PCT7.1: Pre-Class Tutorial: National Income Accounting

PCT7.2: Pre-Class Tutorial: Price Indexing

PCT7.2: Pre-Class Tutorial: Price Indexing

Which is NOT included in the calculation of GDP (gross domestic product) when using the expenditure method? Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices Monica's Hair Salon sells haircuts and manicures to the residents of Marco Island. Harry's Ice Cream Shoppe sells ice cream cones at the beach. Susy's Leather Goods manufactures leather pieces that are sold to manufacturers that produce handbags and wallets from these leather pieces. Joey's Electronics manufactures CD players that individuals install in cars that do not have CD players.

Susy's Leather Goods manufactures leather pieces that are sold to manufacturers that produce handbags and wallets from these leather pieces.

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

Tigerstan; $3,000

WIO7: Work It Out- Ch. 7: GDP and CPI: Tracking the Macroeconomy

WIO7: Work It Out- Ch. 7: GDP and CPI: Tracking the Macroeconomy

GDP and CPI: Tracking the Macroeconomy — End of Chapter Question 3. The components of GDP in the accompanying table were produced by the Bureau of Economic Analysis. Calculate each of the following using the data from the table. Round your answers to one place after the decimal. f. Consumer spending on services as a percentage of total consumer spending % g. Exports as a percentage of imports % h. Government purchases of national defense as a percentage of federal government purchases of goods and services %

[cross multiply] f. 67.6% 8293.1/12271.9 = P/100 g. 81.0% 2253.4/2782.3 = P/100 h. 60.5% national defense/federal 740.7/1224.6 = P/100

The chain-linking method of measuring the change in real GDP applies the average between the GDP growth rate using an early base year and the GDP growth rate using: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices 1975 as the base year. 2000 as the base year. a late base year. 2014 as the base year.

a late base year.

The aggregate price level refers to: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices the total value of all final goods and services produced in the economy during a given year. the amount expended on productive physical capital and on changes to inventories. a measure of the overall level of prices in the economy. a measure of clothing and home heating prices in the economy.

a measure of the overall level of prices in the economy.

GDP and CPI: Tracking the Macroeconomy — End of Chapter Question 4. The small economy of Pizzania produces three goods (bread, cheese, and pizza), each produced by a separate company. The bread and cheese companies produce all the inputs they need to make bread and cheese, respectively. The pizza company uses the bread and cheese from the other companies to make its pizzas. All three companies employ labor to help produce their goods, and the difference between the value of goods sold and the sum of labor and input costs is the firm's profit. The accompanying table summarizes the activities of the three companies when all the bread and cheese produced are sold to the pizza company as inputs in the production of pizzas. a. Calculate GDP as the value added in production. $ b. Calculate GDP as spending on final goods and services. $ c. Calculate GDP as factor income. $

a. b. c.

The small economy of Pizzania produces three goods three goods (bread, cheese and pizza), each produced by a seperate company. The bread and cheese companies produce all the inputs they need to make bread and cheese, respectively. The pizza company uses the bread and cheese from the other companies to make its pizzas. All three companies employ labor to help produce their goods, and the differences between the value of goods sold and the sum of labor and input costs in the firm's profit. The accompanying table summarizes the activities of the three companies when all the bread and cheese produced are sold to the pizza company as inputs in the production of pizzas. a. Calculate GDP as the value added in production. b. Calculate GDP as spending on final goods and services. c. Calculate GDP as factor income.

a. $200 To calculate GDP as the value added in production, for each firm, find the difference between the value of the firm's output and the cost of the firm's inputs. Add those differences together to find GDP. To calculate GDP as the value added in production, we need to sum all value added (value of output minus the value of intermediate goods) for each company. Value added in the bread company is $50; in the cheese company $35; and in the pizza company, $115 (200-50-35). The total value added in production is$200 (50+35+115). b. $200 To calculate GDP as spending on final goods and services, the values of intermediate goods are ignored. In this exercise, only the value of the final good will be included. So spending on all final goods and services is $200. c. $200 To calculate GDP as factor income, we need to sum factor income(wages and profits) for each firm. For the bread company, factor income is $50: labor earns $15 and profit is $35. For the cheese company, factor income is $35: labor earns $20 and profit is $15. For the pizza company, factor income is $115: labor earns $75 and profit is $40(200-75-50-35). Factor income is $200(50+35+115).

GDP and CPI: Tracking the Macroeconomy — End of Chapter Questions 4. In the economy of Pizzania, bread and cheese produced are sold both to the pizza company for inputs in the production of pizzas and to consumers as final goods. The accompanying table summarizes the activities of the three companies. a. Calculate GDP as the value added in production. $ b. Calculate GDP as spending on final goods and services. $ c. Calculate GDP as factor income. $

a. $275 To calculate GDP as the value added in production, for each firm, find the difference between the value of the firm's output and the cost of the firm's inputs. Add those differences together to find GDP. To calculate GDP as the value added in production, we need to sum all value added (value of output minus the value of intermediate goods) for each company. Value added in the bread company is $100; in the cheese company $60; and in the pizza company, $115 (200-50-35). The total value added in production is$275 (100+60+115). b. $275 To calculate GDP as spending on final goods and services, the values of intermediate goods are ignored. In this exercise, only the value of the final good will be included. So spending on all final goods and services is $275. c. $275 To calculate GDP as factor income, we need to sum factor income (labor and profits) for each firm. For the bread company, factor income is $100: labor earns $25 and profit is $75. For the cheese company, factor income is $60: labor earns $30 and profit is $30. For the pizza company, factor income is $115: labor earns $75 and profit is $40 (200-75-50-35). As factor income, GDP equals $275(100+60+115).

GDP and CPI: Tracking the Macroeconomy - End of Chapter Questions 1. The accompanying diagram is a simplified circular-flow diagram for the economy of Micronia. (Note that there is no investment spending and no transfers in Micronia.) A circular flow diagram with six nodes and eight flows. The six nodes are government, households, factor markets, firms, rest of world, and market for goods and services. The eight flows. Taxes equal to 100 dollars which flows from households to government. Government purchase of goods and services equal to 100 dollars which flows from government to markets for goods and services. Imports equal to 20 dollars which flows from markets for goods and services to the rest of the world. Exports equal to 2o dollars which flows from the rest of the world to the markets for goods and services. Consumer spending equal to six hundred fifty dollars which flows from households to the markets for goods and services. Gross domestic production which flows from markets for goods and services to firms. Wages, profit, interest, rent equal to seven hundred fifty dollars which flows from firms to factor markets. Wages, profit, interest, rent equal to seven hundred fifty dollars which flows from factor markets to households. a. What is the value of GDP in Micronia? GDP = $ b. What is the value of net exports? Net exports = $ c. What is the value of disposable income? Disposable income = $ d. Does the total flow of money out of households—the sum of taxes paid and consumer spending—equal the total flow of money into households? Yes No e. How does the government of Micronia finance its purchases of goods and services? Taxes Borrowing

a. $750 b. $0 c. $650 d. yes e. taxes

GDP and the CPI — End of Chapter Problems 1. The accompanying circular-flow diagram represents the economy of Macronia. a. What is the value of GDP in Macronia? GDP = $ b. What is the value of net exports? Net exports = $ c. What is the value of disposable income? Disposable income = $ d. Does the total flow of money out of households—the sum of taxes paid, consumer spending, and private savings—equal the total flow of money into households? Yes No

a. $800 b. $30 c. $710 d. YES GDP is the sum of consumer spending, investment spending, government spending & net exports. net exports are exports minus the imports disposable income is how much income that households have left to either spend or save after they have paid the required taxes. consumer spending + private savings

GDP and CPI: Tracking the Macroeconomy — End of Chapter Question 3. The components of GDP in the accompanying table were produced by the Bureau of Economic Analysis. Calculate each of the following using the data from the table. Round your answers to one place after the decimal. a. Consumer spending $ 12271.9 billion b. Private investment spending $ billion c. Net exports $ billion d. Government purchases of goods and services and investment spending $ billion e. Gross domestic product

a. 12271.9 billion b. 3020.6 billion c. 2253.4 - 2782.3= -528.9 billion Net exports are exports minus imports. If the value is negative, include the negative sign in your answer. d. 3183.4 billion Government expenditures include both the federal government and state and local governments. Add the total for both to find total government expenditures. Notice that in the table the federal total is the sum of defense and nondefense spending. e. 17947 billion GDP=C+I+G+NX GDP= 12271.9+3020.6+3183.4+(-528.9) GDP is the market value of final goods and services produced within the domestic territory of a country during one year. Components of GDP are Consumption expenditure, investment spending, government expenditure and net exports.

GDP and the CPI: Tracking the Macroeconomy - End of Chapter Problems 8. The accompanying table shows data on nominal GDP (in billions of dollars), real GDP (in billions of 2009 dollars), and population (in thousands) of the United States in 1965, 1975, 1985, 1995, 2005, and 2015. The U.S. price level rose consistently over the 1965‑2015 period. a. Why is real GDP greater than nominal GDP for all years until 2005 and lower for 2015? The value of GDP fell dramatically after 2005. There was inflation until 2005 and deflation after 2005. 2009 is the base year, and prices rose from 1965 to 2015. Because 2009 is the base year, real and nominal GDP in years prior to 2009 are equal, but price changes post‑2009 drove them apart. b. Calculate the percent change in real GDP for the following periods (round answers to the nearest tenth): 1965‑1975: % 1975‑1985: % 1985‑1995: % 1995‑2005: % 2005‑2015: % Which period had the highest growth rate? 1965‑1975 1975‑1985 1985‑1995 1995‑2005 2005‑2015

a. 2009 is the base year, and prices rose from 1965 to 2015. b. Use 2009 dollars. To calculate the percentage change of a variable between two years. 1. find the difference between the newer value and the older value. 2. divide the difference by the older value. 3. multiply by 100. 1965-1975 [5385.4-3976.7=1408.7][1408.7/3976.7*100=35.4%] 1975-1985 [7593.8-5385.4=2208.4] [2208.4/5385.4*100=41%] 1985-1995 [10174.8-7593.8=2581] [2581/7593.8*100=34% 1995-2005 [14234.2-10174.8=4060] [4060/10174.8*100=40%] 2005-2015 [16348.9-14234.2=2114.7] [2114.7/14234.2*100=14.9%] highest growth rate is 1975-1985

GDP and the CPI: Tracking the Macroeconomy - End of Chapter Problems 9. Eastland College is concerned about the rising price of textbooks that students must purchase. To better identify the increase in the price of textbooks, the dean asks you, the Economics Department's star student, to create an index of textbook prices. The average student purchases three English, two math, and four economics textbooks per year. The prices of these books are given in the accompanying table. a. What is the percent change in the price of an English textbook from 2014 to 2016? Round to two places after the decimal point. % b. What is the percent change in the price of a math textbook from 2014 to 2016? % c. What is the percent change in the price of an economics textbook from 2014 to 2016? % d. Using 2015 as a base year, create a price index for these books for all years. Index value for 2014 = Index value for 2015 = Index value for 2016 =

a. 33.00% b. 15.71% c. 16.56% d. Index value for 2014 = 91.87 Index value for 2015 = 100 Index value for 2016 = 110.59 e. percent change = 20.37% 110.59/91.89*100-100=20.37

GDP and the CPI: Tracking the Macroeconomy — Discovering Data The accompanying graph plots annual Gross Domestic Product (GDP) for the United States of America. b. Calculate the absolute change in GDP between 2015 and 2016, then calculate the percentage change in GDP between 2015 and 2016. Round answer to three places after the decimal. absolute change: $ billion % change: %

absolute change 18624.475-18120.714=503.761 billion -------------------------------------- percentage change in GDP between 2015 and 2016 =absolute change/GDP in 2015 *100 =503.761/18120.714 *100 =2.780%

Government raises funds through taxation: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices purchases of goods and services, and by borrowing in financial markets. and by borrowing in financial markets. and transfer payments. purchases of goods and services, and revenues received for intermediate goods produced by the government.

and by borrowing in financial markets.

C + I + G + X - IM is: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices the way in which GDP is calculated using the factor payments approach. equal to an economy's GDP for a given period of time. a measure of the overall market value of all intermediate and final goods and services produced by an economy during a given period of time. the way in which GDP is calculated using the value added approach.

equal to an economy's GDP for a given period of time.

The table represents data on the economy of the nation of Synesthesia. Based on the table, the value of real GDP in 2014 was: A table shows the Nominal GDP, Real GDP, and GDP Deflator during the years 2012 to 2015. The data are as follows: Year: 2012, Nominal GDP: 99, Real GDP: Blank space, GDP Deflator: 90. Year: 2013, Nominal GDP: 120, Real GDP: Blank space, GDP Deflator: 100. Year: 2014, Nominal GDP: 132, Real GDP: Blank space, GDP Deflator: 110. Year: 2015, Nominal GDP: Blank space, Real GDP: 150, GDP Deflator: 94. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices less than 100. not possible to calculate given the available data. greater than 100. equal to 100.

greater than 100 Real GDP is equal to 100 times the ratio of nominal GDP to the GDP deflator.

Bensalem is a small country; it had only 10 people and the GDP of its economy was $10,000 in 2014. Amazingly, the GDP in Bensalem in 2015 increased to $20,000 while the population increased by 50 percent. As a result, GDP per capita in Bensalem in 2015: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices decreased, because the percentage change in GDP was smaller than the percentage change in population. did not change, because the percentage change in GDP was the same as the percentage change in population. decreased, because of the very large percentage increase in population. increased, because the percentage change in GDP was greater than the percentage change in population.

increased, because the percentage change in GDP was greater than the percentage change in population.

The _____ is the percentage increase per year in a price index. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices inflation rate consumer price index aggregate price level deflation rate

inflation rate

Tinytown produces tractors and pizzas. Based on the table, if 2013 was the base year, real GDP in Tinytown in 2014 was: A table shows the quantity and price of tractors and pizzas in the years 2013, 2014, and 2015. The data are as follows: Year 2013, Quantity of tractors: 5, Price of tractors: 10,000 dollars; Quantity of pizzas: 100; Price of pizzas: 10 dollars. Year 2014, Quantity of tractors: 5, Price of tractors: 12,000 dollars; Quantity of pizzas: 80; Price of pizzas: 20 dollars. Year 2015, Quantity of tractors: 5, Price of tractors: 15,000 dollars; Quantity of pizzas: 100; Price of pizzas: 20 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices greater than nominal GDP in 2014. less than nominal GDP in 2014. equal to nominal GDP in 2014. a value that may be greater than, less than, or equal to nominal GDP in 2014.

less than nominal GDP in 2014.

The city-republic of Schilda produces tractors and pizzas. This information is shown in the table. Based on the table, if 2013 is the base year: A table shows the quantity and price of tractors and pizzas in the years 2013, 2014, and 2015. The data are as follows: Year 2013, Quantity of tractors: 5, Price of tractors: 10,000 dollars; Quantity of pizzas: 100; Price of pizzas: 10 dollars. Year 2014, Quantity of tractors: 5, Price of tractors: 12,000 dollars; Quantity of pizzas: 80; Price of pizzas: 20 dollars. Year 2015, Quantity of tractors: 5, Price of tractors: 15,000 dollars; Quantity of pizzas: 100; Price of pizzas: 20 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices nominal GDP increased every year in Schilda. real GDP using 2013 as the base year increased from 2013 to 2014 and decreased from 2014 to 2015. real GDP increased every year in Schilda. nominal GDP increased from 2013 to 2014, and decreased from 2014 to 2015.

nominal GDP increased every year in Schilda.

The price index that serves as an "early warning signal" for inflation in the United States is the: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices producer price index. national income index. consumer price index. GDP deflator.

producer price index.

The GDP deflator: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices refers to the ratio of nominal to real GDP. is commonly considered the "early warning signal" for inflation in the United States. refers to the ratio of real to nominal GDP. refers to the percentage change per year in a price index.

refers to the ratio of nominal to real GDP.

GDP and CPI Work It Out: Question 2 of 4 The economy of Britannica produces three goods: computers, Blu-rays, and pizza. The accompanying table shows the prices and output of the three goods for the years 2012, 2013, and 2014. Computers Blu-rays Pizzas Year Price Quantity Price Quantity Price Quantity 2012 $900 10 $10 100 $15 2 2013 1,000 10.5 12 105 16 2 2014 1,050 12 14 110 17 3 Calculate real GDP in Britannica using 2012 prices for each of the three years. Round answers to two places after the decimal point when applicable. 2012 real GDP: $ 2013 real GDP: $ 2014 real GDP: $ Calculate the percentage change in real GDP for 2012-2013 and 2013-2014. Round answers to two places after the decimal point when applicable. 2012-2013: % 2013-2014: %

since real GDP in 2012 is $10030 value of computers in 2013(using 2012 prices)=$900*10.5=$9450 value of blu-rays in 2013(using 2012 prices) =$10*105=$1050 value of pizzas in 2013(using 2012 prices) =$15*2=$30 real GDP for 2013 $10530 value of computers in 2014(using 2012 prices)=$900*12=$10800 value of blu-rays in 2014(using 2012 prices) =$10*110=$1100 value of pizzas in 2014(using 2012 prices) =$15*3=$45 real GDP for 2014 $11945 The percent change in real GDP From 2012 to 2013 [(10530-10030)/10030]*100=4.99% From 2013 to 2014 [(11945-10530)/10530]*100=13.44%

A(n) _____ is a share (or shares) of ownership of a company. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices shareholder inventory stock bond

stock

A small economy produces three items: wheat, flour, and bread. Farmer Zack produces wheat and sells it to the Big Gluten Company. The Big Gluten Company produces flour and sells it to the Fragrant Bread Corporation. This information is shown in the table. The value added by Farmer Zack is: A table shows 4 rows and 3 columns. The row headers are as follows: Intermediate goods, Wages, Profits, Value of output. The column headers are as follows: Farmer Zack, Big Gluten Company, Fragrant Bread Corporation. The data read as follows: Intermediate Goods: Farmer Zack, 0 dollars; Big Gluten Company, 40 dollars; Fragrant Bread Corporation, 110 dollars. Wages: Farmer Zack, 30 dollars; Big Gluten Company, 50 dollars; Fragrant Bread Corporation, 60 dollars. Profits: Farmer Zack, 10 dollars; Big Gluten Company, 20 dollars; Fragrant Bread Corporation, 40 dollars. Value of output: Farmer Zack, 40 dollars; Big Gluten Company, 110 dollars; Fragrant Bread Corporation, 210 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices $10. $30. $40. $210.

subtract the value of intermediate-goods from the total value of output. 40-0=$40

From a household's perspective, a share of stock represents: Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices the indirect ownership of physical capital used by firms. a loan to the firm that will provide interest to the household. the ownership of part of the firm. a firm engaging in borrowing from a foreign country.

the ownership of part of the firm.

Leap Island produces tractors and pizzas. This information is shown in the table. Based on the table, if the base year is 2014, real GDP in Leap Island was: A table shows the quantity and price of tractors and pizzas in the years 2013, 2014, and 2015. The data are as follows: Year 2013, Quantity of tractors: 5, Price of tractors: 10,000 dollars; Quantity of pizzas: 100; Price of pizzas: 10 dollars. Year 2014, Quantity of tractors: 5, Price of tractors: 12,000 dollars; Quantity of pizzas: 80; Price of pizzas: 20 dollars. Year 2015, Quantity of tractors: 5, Price of tractors: 15,000 dollars; Quantity of pizzas: 100; Price of pizzas: 20 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices greatest in 2015. greatest in 2013. greatest in 2014. the same in 2013 and 2015.

the same in 2013 and 2015

Erewhon produces tractors and pizzas. This information is shown in the table. Based on the table, if 2013 is the base year, real GDP in Erewhon was: A table shows the quantity and price of tractors and pizzas in the years 2013, 2014, and 2015. The data are as follows: Year 2013, Quantity of tractors: 5, Price of tractors: 10,000 dollars; Quantity of pizzas: 100; Price of pizzas: 10 dollars. Year 2014, Quantity of tractors: 5, Price of tractors: 12,000 dollars; Quantity of pizzas: 80; Price of pizzas: 20 dollars. Year 2015, Quantity of tractors: 5, Price of tractors: 15,000 dollars; Quantity of pizzas: 100; Price of pizzas: 20 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices greatest in 2015. greatest in 2013. the same in 2013 and 2015. greatest in 2014.

the same in 2013 and 2015.

The Beklan Empire produces tractors and pizzas. This information is shown in the table. Based on the table, if 2015 is the base year, real GDP in the Beklan Empire was: A table shows the quantity and price of tractors and pizzas in the years 2013, 2014, and 2015. The data are as follows: Year 2013, Quantity of tractors: 5, Price of tractors: 10,000 dollars; Quantity of pizzas: 100; Price of pizzas: 10 dollars. Year 2014, Quantity of tractors: 5, Price of tractors: 12,000 dollars; Quantity of pizzas: 80; Price of pizzas: 20 dollars. Year 2015, Quantity of tractors: 5, Price of tractors: 15,000 dollars; Quantity of pizzas: 100; Price of pizzas: 20 dollars. Please choose the correct answer from the following choices, and then select the submit answer button. Answer choices greatest in 2015. greatest in 2014. greatest in 2013. the same in 2013 and 2015.

the same in 2013 and 2015.