ECN Q6

If the nominal interest rate is 2% and inflation is 3%, the real interest rate is:

-1%.

If the percent change in nominal GDP is 3% and inflation is 4%, the percent change in real GDP is:

-1%.

If nominal GDP is $15 trillion and real GDP is $12 trillion, the GDP deflator is:

125 (15/12) x 100

If the percent change in real GDP is 5% and inflation rate is 1%, what is the percent change in nominal GDP?

6%

If U.S. net exports are positive, then U.S.:

GDP exceeds the sum of consumption, investment, and government purchases.

Which of the following is a part of GDP?

The value of a haircut

For a one-person economy and for a complex economy like the U.S.,

income = output

Using the expenditure approach, gross domestic product equals:

the sum of consumption, investment, government purchases, and net exports.

For the purposes of calculating GDP, investment includes:

the value of new residential construction.

Aggregate income includes all of the following except:

transfer payments

Government expenditures for Social Security and unemployment insurance are, for GDP accounting purposes, considered:

transfers, and are not included in government spending as part of GDP.

A price index in years beyond the base year:

can be less than, greater than, or equal to 100

If the CPI in year 2 equals 110 and the CPI in year 3 equals 121, it can be concluded that consumer prices:

rose from year 2 to year 3 by 10%.

Question 11

table

If gross investment is $2,593 billion and net investment is $873 billion, depreciation is:

$1,720 billion.

Question 7

table

Question 9

table

To calculate GDP:

add up the value of all final goods and service produced in an economy in a year.

The difference between nominal GDP and real GDP is that:

real GDP adjusts the value of goods for changes in the price level and nominal GDP does not.

Suppose that both nominal GDP and prices double. We can conclude that real output:

remained constant