Econ 102 Exam review

7. Refer to Table 23-6. In 2010, this country's GDP deflator was a. 41.9. b. 100. c. 165.0. d. This cannot be calculated from the information given.

A

11. Refer to Table 23-6. From 2012 to 2013, this country's output grew a. 28.2%. b. 29.0%. c. 29.6%. d. 73.9%.

B

3. Refer to Table 23-10. What was this country's nominal GDP in 2014? a. $9,500 b. $10,000 c. $10,200 d. $10,500

B

6. Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been selected as the base year. In 2012, the basket's cost was $50; in 2014, the basket's cost was $51; and in 2016, the basket's cost was $52. The value of the CPI in 2014 was a. 98.0. b. 102.0. c. 104.0. d. 151.0.

B

11. AA Appliances sells refrigerators. In 2015 it added $100,000 to its inventory. $10,000 of this addition was from used refrigerators, and the remaining $90,000 was from their purchases of newly manufactured refrigerators. How much of AA's inventory is included in 2015 GDP? a. $0 b. b. $10,000 c. c. $90,000 d. d. $100,000

C

13. Refer to Table 23-6. This country's inflation rate from 2012 to 2013 was a. 35.6%. b. 25.8%. c. 34.8%. d. 100.0%.

C

2. Refer to Table 23-10. In which year was this country's real GDP highest? a. 2014 b. 2015 c. 2016 d. 2017

C

3. Refer to Table 24-10. If 2009 is the base year, then the consumer price index was a. 83.00 in 2008, 100.00 in 2009, and 132.50 in 2010. b. 89.97 in 2008, 100.00 in 2009, and 117.43 in 2010. c. 90.88 in 2008, 100.00 in 2009, and 117.43 in 2010. d. 169.50 in 2008, 186.50 in 2009, and 219.00 in 2010.

C

4. Refer to Table 23-10. What was this country's real GDP in 2016? a. $10,575 b. $11,250 c. $10,950 d. $12,550

C

4. Refer to Table 23-6. In 2011, this country's real GDP was a. $320. b. $440. c. $760. d. $770.

C

5. Refer to Table 23-6. In 2012, this country's real GDP was a. $510. b. $690. c. $930. d. $780.

C

10. Refer to Table 23-6. In 2012, this country's GDP deflator was a. 74.2. b. 100.0. c. 171.4. d. 240.0.

A

2. For an economy as a whole, a. the market value of production must equal expenditure. b. investment must equal the value of stocks and bonds purchased. c. wages must equal income. d. consumption must equal saving.

A

2. In the calculation of the CPI, books are given greater weight than magazines if a. consumers buy more books than magazines. b. the price of books is higher than the price of magazines. c. it costs more to produce books than it costs to produce magazines. d. books are more readily available than magazines to the typical consumer.

A

3. Refer to Table 23-6. In 2010, this country's real GDP was a. $620. b. $260. c. $400. d. $630.

A

4. Refer to Table 24-10. If 2010 is the base year, then the consumer price index was a. 77.40 in 2008, 85.16 in 2009, and 100.00 in 2010. b. 50.50 in 2008, 67.50 in 2009, and 100.00 in 2010. c. 90.88 in 2008, 85.16 in 2009, and 100.00 in 2010. d. 169.50 in 2008, 186.50 in 2009, and 219.00 in 2010

A

5. Refer to Table 23-10. What was this country's GDP deflator in 2017? a. 123.4 b. 116.7 c. 120.0 d. None of the above is correct.

A

5. Refer to Table 24-10. The inflation rate was a. 10.03 percent in 2009 and 17.43 percent in 2010. b. 17.00 percent in 2009 and 32.50 percent in 2010. c. 10.03 percent in 2009 and 29.20 percent in 2010. d. 17.00 percent in 2009 and 29.20 percent in 2010.

A

9. Refer to Table 23-6. In 2011, this country's GDP deflator was a. 57.9. b. 100.0. c. 137.5. d. 169.2.

A

A dairy buys $50,000 worth of milk and spend $5,000 on cartons and utilities. It sells the cartons of milk to a grocery store for $60,000 that then sells all of the cartons to consumers for $65,000. How much do these actions add to GDP? a. a. $55,000 b. b. $65,000 c. c. $120,000 d. d. None of the above are correct.

B

In the actual economy, households a. spend all of their income. b. divide their income among spending, taxes, and saving. c. buy all goods and services produced in the economy. d. Both (a) and (c) are correct.

B

1. In the CPI, goods and services are weighted according to a. how long a market has existed for each good or service. b. the extent to which each good or service is regarded by the government as a necessity. c. how much consumers buy of each good or service. d. the number of firms that produce and sell each good or service.

C

10. In 2014, a farmer grows and sells $3 million worth of corn to Big Flakes Cereal Company. Big Flakes Cereal Company produces $8 million worth of cereal in 2014, with sales to households during the year of $7 million. The unsold $1 million worth of cereal remains in Big Flake Cereal Company's inventory at the end of 2014. The transactions just described contribute how much to GDP for 2014? a. $3 million b. $7 million c. $8 million d. $11 million

C

Rachel babysits for her sister for no pay. When she babysits for someone else she charges $8 an hour. When is Rachel's babysitting included in GDP? a. When she babysits for her sister and when she babysits for someone else. b. When she babysits for her sister, but not when she babysits for someone else. c. When she babysits for someone else, but not when she babysits for her sister. d. Neither when she babysits for her sister nor for someone else.

C

Table 24-10 The table below shows the prices of baseballs and baseball bats for three years. Assume the typical consumer's basket consists of 6 baseballs and 2 baseball bats. Year Price of a Baseball Price of a Baseball Bat 2008 $3.25 $75 2009 $3.75 $82 2010 $4.50 $96 1. Refer to Table 24-10. How much was the cost of the basket in 2008? a. $78.25 b. $84.75 c. $169.50 d. $456.50

C

4. The inflation rate is calculated a. by determining the change in the price index from the preceding period. b. by adding up the price increases of all goods and services. c. by computing a simple average of the price increases for all goods and services. d. by determining the percentage increase in the price index from the preceding period.

D

5. If 2010 is the base year, then the inflation rate in 2015 equals a. b. c. d.

D

6. Refer to Table 23-6. In 2013, this country's real GDP was a. $500. b. $700. c. $900. d. $1200.

D

A small economy produced and consumed goods X and Y in 2010 and 2011 in the amounts shown in the table below. Assume that the market basket for the CPI is defined in the base year. Good X Good Y Quantity Price Quantity Price 2010 50 $100 100 $10 2011 60 $120 120 $12 1. Refer to Scenario 24-6. Using 2010 as the base year, what is the CPI in each year?

The CPI is 100.00 in 2010 and 120.00 in 2011.

According to the circular-flow diagram GDP a. can be computed as either the revenue firms receive from the sales of goods and services or the payments they make to factors of production. b. can be computed as the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production. c. can be computed as payments firms make to factors of production but not as revenues they receive from the sales of goods and services. d. cannot be computed as either the revenue firms receive or the payments they make to factors of production.

A

Gross domestic product adds together many different kinds of goods and services into a single measure of the value of economic activity. To do this, GDP makes use of a. market prices. b. statistical estimates of the value of goods and services to consumers. c. prices based on the assumption that producers make no profits. d. the maximum amount consumers would be willing to pay.

A

Table 23-6 The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2013. Year Price of Waffles Quantity of Waffles Price of Pancakes Quantity of Pancakes 2010 $2.00 80 $1.00 100 2011 $2.00 100 $2.00 120 2012 $2.00 120 $3.00 150 2013 $4.00 150 $3.00 200 1. Refer to Table 23-6. In 2010, this country's nominal GDP was a. $260. b. $440. c. $620. d. $760.

A

12. Refer to Table 23-6. This country's inflation rate from 2010 to 2011 was a. 1.38%. b. 38.20%. c. 138.20%. d. 41.90.

B

2. Refer to Table 23-6. In 2011, this country's nominal GDP was a. $260. b. $440. c. $620. d. $760.

B

2. Refer to Table 24-10. If 2008 is the base year, then the consumer price index was a. 100.00 in 2008, 110.03 in 2009, and 117.43 in 2010. b. 100.00 in 2008, 110.03 in 2009, and 129.20 in 2010. c. 100.00 in 2008, 117.00 in 2009, and 132.50 in 2010. d. 169.50 in 2008, 186.50 in 2009, and 219.00 in 2010.

B

3. Consider a small economy in which consumers buy only two goods: apples and pears. In order to compute the consumer price index for this economy for two or more consecutive years, we assume that a. the number of apples bought by the typical consumer is equal to the number of pears bought by the typical consumer in each year. b. neither the number of apples nor the number of pears bought by the typical consumer changes from year to year. c. the percentage change in the price of apples is equal to the percentage change in the price of pears from year to year. d. neither the price of apples nor the price of pears changes from year to year.

B

6. Suppose that an economy produces 20,000 units of good A which sells at $3 a unit and 40,000 units of good B which sells at $1 per unit. Production of good A contributes a. 1/3 times as much to GDP as the production of good B. b. 3/2 times as much to GDP as the production of good B. c. 3 times as much to GDP as the production of good B. d. 2/3 times as much to GDP as production of good B.

B

8. Refer to Table 23-6. In 2013, this country's GDP deflator was a. 1.0. b. 100.0. c. 171.4. d. 240.0.

B

Table 23-10 A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2015 . Year Price of Movies Quantity of Movies Price of Popcorn Quantity of Popcorn 2014 $10.00 500 $5 1000 2015 $11.00 600 $4 900 2016 $12.00 650 $5 950 2017 $12.00 625 $6 925 1. Refer to Table 23-10. In which year was this country's nominal GDP highest? a. 2014 b. 2015 c. 2016 d. 2017

D

The purchase of rice produced this period is included in GDP if the rice is a. used in a meal a restaurant sells during the same period they buy the rice. b. purchased by a family who uses it to make tuna casserole for its supper. c. purchased by a frozen food company to increase its inventory. d. B and C are correct.

D

Which of the following topics are more likely to be studied by a macroeconomist than by a microeconomist? a. the effect of taxes on the prices of airline tickets, and the profitability of automobile-manufacturing firms b. the price of beef, and wage differences between genders c. how consumers maximize utility, and how prices are established in markets for agricultural products d. the percentage of the labor force that is out of work, and differences in average income from country to country

D

2. Refer to Scenario 24-6. Using 2010 as the base year, what is the inflation rate in 2011?

The inflation rate is 20%.