Exam 2: The Measurement and Structure of the National Economy

By Marks buys a one-year German government bond (called a bund)for $400.He receives principal and interest totaling $436 one year later.During the year the CPI rose from 150 to 162,but he had thought the CPI would be at 159 by the end of the year.By Marks had expected the real interest rate to be ________,but it actually turned out to be ________.

The U.S.inflation rate ________ in the 1960s and 1970s,________ in the 1980s,and ________ in the 1990s and 2000s.

In a given year,a country's GDP = $9841,net factor payments from abroad = $889,taxes = $869,transfers received from the government = $296,interest payments on the government's debt = $103,consumption = $8148,and government purchases = $185.The country had government saving equal to

The accounting framework used in measuring current economic activity is called

Loretta agrees to lend Ted $500,000 to buy computers for his consulting firm.They agree to a nominal interest rate of 8%.Both expect the inflation rate to be 2%. (a)Calculate the expected real interest rate. (b)If inflation turns out to be 3% over the life of the loan,what is the real interest rate? Who gains from unexpectedly high inflation,Loretta or Ted? (c)If inflation turns out to be 1% over the life of the loan,what is the real interest rate? Who gains from unexpectedly low inflation,Loretta or Ted?

In the expenditure approach to GDP,which of the following would be excluded from measurements of GDP?

The country of Old Jersey produces milk and butter,and it has published the following macroeconomic data,where quantities are in gallons and prices are dollars per gallon. Between Year 1 and Year 2,the GDP deflator (based on Year 1 as a base year)rose

The CPI may overstate inflation for all the following reasons except

Which of the following equations describes the government deficit?

You are given information on the consumer price index (CPI),where the values given are those for December 31 of each year. In which year was the inflation rate the highest?

What is the difference between nominal and real economic variables? Why do economists tend to concentrate on changes in real magnitudes?

If the expected inflation rate was 2.5%,the expected real interest rate was 4.0%,and the real interest rate turned out to be 5.1%,then the nominal interest rate equals

What is the main conceptual difference between GDP and GNP? How different are GDP and GNP for the United States? For countries with many citizens who work abroad?

Which of the following equations describes government saving?

Monica grows coconuts and catches fish.Last year she harvested 1500 coconuts and 600 fish.She values one fish as having a worth of three coconuts.She gave Rachel 300 coconuts and 100 fish for helping her to harvest coconuts and catch fish,all of which were consumed by Rachel.In terms of fish,Monica's income would equal

A disadvantage of chain-weighting is that

The product approach to calculating GDP

The value of real GDP in the current year equals

National saving equals private saving plus government saving,which in turn equals

The government budget surplus equals