Exam 2: The Measurement and Structure of the National Economy

The nominal interest rate is 7%,today's price level is 150,and you expect the price level to be 156 one year from now.What is the expected inflation rate? What is the expected real interest rate?

Net national product equals

Nations such as Egypt and Turkey may have wide differences between GNP and GDP because both the countries

Nominal GDP in a country was $8,759.9 billion in 2009 and $9,254.6 billion in 2010.The GDP deflator was 102.86 for 2009 and 104.37 for 2010. (a)What is the growth rate of nominal GDP between 2009 and 2010? (b)What is the inflation rate from 2009 to 2010? (c)What is the growth rate of real GDP from 2009 to 2010?

In a given year,a country's GDP = $3843,net factor payments from abroad = $191,taxes = $893,transfers received from the government = $422,interest payments on the government's debt = $366,consumption = $3661,and government purchases = $338.Calculate the values of private saving,government saving,and national saving.

Because government services are not sold in markets,

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 country of Kwaki,people produce canoes,fish for salmon,and grow corn.In one year they produced 5000 canoes using labor and natural materials only,but sold only 4000,as the economy entered a recession.The cost of producing each canoe was $1000,but the ones that sold were priced at $1250.They fished $30 million worth of salmon.They used $3 million of the salmon as fertilizer for corn.They grew and ate $55 million of corn.What was Kwaki's GDP for the year?

If the expected inflation rate was 2.5%,the expected real interest rate was 4.0%,and the actual inflation rate turned out to be 3.2%,then the real interest rate equals

Suppose that private saving is $1590 billion,investment is $1945 billion,and the current account balance is -$489 billion.From the uses-of-saving identity,how much is government saving?

To ensure that the fundamental identity of national income accounting holds,changes in inventories are

The country of Myrule has produced the following quantity of gauges and potatoes,with the price of each listed in dollar terms. (a)Using Year 1 as the base year,what is the growth rate of real GDP from Year 1 to Year 2? (b)Based on the GDP deflator,what is the inflation rate from Year 1 to Year 2?

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.The nominal interest rate on the bond was ________,and the real interest rate was ________.

The measurement of GDP includes

Which of the following is included in U.S.GDP?

Sam's Semiconductors produces computer chips,which it sells for $10 million to Carl's Computer Company (CCC).CCC's computers are sold for a total of $16 million.What is the value added of CCC?

The CPI may overstate inflation for all the following reasons except

Saving is a ________ variable,and wealth is a ________ variable.

The fundamental identity of national income accounting is

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