Exam 2: Measuring the Macroeconomy

Nominal GDP is the value of goods and services

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Table 2.1 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2012 $\quad$$\quad$$\quad$ 2013 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Quantity $\quad$ Price $\quad$ Quantity $\quad$ Price Apples 50 \ 0.40 75 \ 0.50 Huritos 80 1.50 100 1.60 Chewing Gum 60 1.25 70 1.50 Table 2.1 gives quantities and prices for each good produced in a simple economy in 2012 and 2013. -Refer to Figure 2.1GDP in 2012 is

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Table 2.3 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2007 $\quad$$\quad$$\quad$ 2010 $\quad$$\quad$$\quad$$\quad$ 2013 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Quantity Price $\quad$ Quantity Price $\quad$ Quantity Price Peaches 150 \ 0.20 170 \ 0.30 190 Tacos 75 0.80 80 1.00 100 1.20 Flashlights 3.00 40 3.50 50 Hamoricas 14.00 25 16.00 1 Table 2.3 gives quantities and prices for each good produced in a simple economy in 2007, 2010, and 2013. -Refer to Figure 2.3.Nominal GDP in 2007 is

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Table 2.3 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2007 $\quad$$\quad$$\quad$ 2010 $\quad$$\quad$$\quad$$\quad$ 2013 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Quantity Price $\quad$ Quantity Price $\quad$ Quantity Price Peaches 150 \ 0.20 170 \ 0.30 190 Tacos 75 0.80 80 1.00 100 1.20 Flashlights 3.00 40 3.50 50 Hamoricas 14.00 25 16.00 1 Table 2.3 gives quantities and prices for each good produced in a simple economy in 2007, 2010, and 2013. -Refer to Figure 2.3.Assume that 2010 is the base year.Real GDP in 2010 is

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Table 2.3 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2007 $\quad$$\quad$$\quad$ 2010 $\quad$$\quad$$\quad$$\quad$ 2013 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Quantity Price $\quad$ Quantity Price $\quad$ Quantity Price Peaches 150 \ 0.20 170 \ 0.30 190 Tacos 75 0.80 80 1.00 100 1.20 Flashlights 3.00 40 3.50 50 Hamoricas 14.00 25 16.00 1 Table 2.3 gives quantities and prices for each good produced in a simple economy in 2007, 2010, and 2013. -Refer to Figure 2.3.Assume that 2010 is the base year.Real GDP in 2007 is

All of the following are examples of residential investment spending,except

Suppose Chevrolet produced 90 000 Camaros in Canada in 2012 and during 2012 sold 69 000 to Canadian customers and exported 14 000 to foreign buyers.How many Camaros would Statistics Canada count as investment spending by Chevrolet in 2012?

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Table 2.3 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2007 $\quad$$\quad$$\quad$ 2010 $\quad$$\quad$$\quad$$\quad$ 2013 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Quantity Price $\quad$ Quantity Price $\quad$ Quantity Price Peaches 150 \ 0.20 170 \ 0.30 190 Tacos 75 0.80 80 1.00 100 1.20 Flashlights 3.00 40 3.50 50 Hamoricas 14.00 25 16.00 1 Table 2.3 gives quantities and prices for each good produced in a simple economy in 2007, 2010, and 2013. -Refer to Figure 2.3.Assume that 2010 is the base year.The GDP deflator for 2007 is

Suppose you borrow $8000 for one year and at the end of the year you repay the $8000 plus $600 of interest.The expected inflation rate was 3.5% at the time you took out the loan,but the actual inflation rate turned out to be 2.5%.What was the expected real interest rate at the time of the loan? What was the actual real interest rate you paid? Who gained and who lost from the difference in the expected and actual inflation rates?

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Table 2.5 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2012 $\quad$$\quad$ 2013 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Quantity Price $\quad$ Quantity Price Pineapples 20 \ 0.50 25 \ 0.55 Milkshakes 70 1.50 90 1.75 Lipstick 20 2.00 30 2.25 Bookmarks 35 0.75 35 1.00 Table 2.5 gives quantities and prices for each good produced in a simple economy in 2012 and 2013. -Refer to Figure 2.5.Calculate nominal and real GDP for 2012 and 2013.Assume 2012 is the base year.What is the value of the GDP deflator for 2012 and for 2013?

Explain the difference between GDP and GNP.

If a U.S.firm opens a production facility in Canada,the profits from this production facility received by the U.S.owners of the firm in exchange for the factors of production they supply will be included in the

The consumer price index is

Suppose you borrow $2000 for one year and at the end of the year you repay the $2000 plus $110 of interest.The expected inflation rate was 2.2% at the time you took out the loan,but the actual inflation rate turned out to be 3.3%.What was the actual real interest rate you paid?

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Table 2.4 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2011 $\quad$$\quad$$\quad$$\quad$ 2012 Noriiral GDP \ 555 million \ 610 rillion Real GDP \ 480 rillion \ 575 million -Refer to Figure 2.4.The GDP deflator for 2012 is

A country in which a substantial amount of the factories and stores that produce domestic goods and services are foreign-owned is most likely a country in which

An example of fixed investment spending is

$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Table 2.6 $\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ 2011 $\quad$$\quad$$\quad$$\quad$$\quad$ 2012 Noriiral GDP \ 350 rillion \ 390 rillion Real GDP \ 325 rillion \ 375 million -Refer to Figure 2.6What is the inflation rate for 2012?

If nominal GDP in 2012 was less than real GDP in 2012,we know for certain that

Explain the difference between nominal GDP and real GDP.Which is more important when using GDP as a measure of production? Why?