Macro ch 10 PS questions

A country's real GDP rose from 500 to 550 while its nominal GDP rose from 600 to 770. What was this country's inflation rate?

16.7%

Consumption consists of spending by households on goods and services, with the exception of

purchasing new houses

Macroeconomists study

the interaction between households and firms

Martin, a U.S. citizen, travels to Mexico and buys a newly manufactured motorcycle made there. His purchase is included in

Mexican GDP, but is not included in the US GDP

changes in nominal GDP reflect

both changes in prices and changes in the amounts being produced

For an economy as a whole, income must equal expenditure because

every dollar of spending by some buyer is a dollar of income for some seller.

social security payments are

excluded from GDP because they do not reflect the economy's production.

Which of the following examples of household spending is categorized as investment rather than consumption?

expenditures on new housing

In the economy of Ukzten in 2010, consumption was $5300, GDP was $8800, government purchases were $1800, imports were $500, and investment was $2000. What were Ukzten's exports in 2010?

200

James owns two houses. He rents one house to the Johnson family for $10,000 per year. He lives in the other house. If he were to rent the house in which he lives, he could earn $12,000 per year in rent. How much do the housing services provided by the two houses contribute to GDP?

22,000

A farmer sells $50,000 of apples to individuals who take them home to eat and $75,000 of apples to a company that uses them all to produce cider. How much of the farmer's sales will be included as apples in GDP?

50,000

Suppose that an economy produces 40,000 units of good A which sells at $4 a unit and 20,000 units of good B which sells at $5 per unit. Production of good A contributes

8/5 times as much to GDP as the production of good B

If real GDP is 5,100 and nominal GDP is 4,900, then the GDP deflator is

96.1 so prices are lower than in the base year

Sam, an American citizen, prepares meals for his family at home. Ellen, a Canadian citizen, commutes to the U.S. to help prepare meals at a restaurant in Idaho. Whose value of services preparing meals is included in U.S. GDP?

Ellen's but not Sam's

Which of the following is not an example of a nondurable good?

a microwave

Which of the following is not included in GDP?

carrots grown in your garden and eaten by your family

A U.S. citizen buys a tea kettle manufactured in China by a company that is owned and operated by U.S citizens. In which of the following components of U.S. GDP is this transaction accounted for?

consumption and imports

GDP excludes most items that are produced and sold illegally and most items that are produced and consumed at home because

measuring them is so difficult