Question 1

The inflation rate in year 2 equals

Accepted Answer

A)    . 
B)    . 
C)    . 
D)    . 
A)    . 
B)    . 
C)    . 
D)    . A

Question 2

If in some year real GDP was $25 billion and the GDP deflator was 68,what was nominal GDP?

Accepted Answer

A) $2.72 billion. 
B) $17 billion. 
C) $36.8 billion. 
D) $43 billion. 
A) $2.72 billion. 
B) $17 billion. 
C) $36.8 billion. 
D) $43 billion. B

Question 3

Much of macroeconomics attempts to explain

Accepted Answer

A) changes in the price of oil and gasoline. 
B) long-run growth and short-run fluctuations in real GDP. 
C) changes in the growth rate of state government spending. 
D) changes in the prices and quantities of individual goods and services. 
A) changes in the price of oil and gasoline. 
B) long-run growth and short-run fluctuations in real GDP. 
C) changes in the growth rate of state government spending. 
D) changes in the prices and quantities of individual goods and services. B

Question 4

If nominal GDP is $10 trillion and real GDP is $8 trillion,then the GDP deflator is

Accepted Answer

A) 80,and this indicates that the price level has decreased by 20 percent since the base year. 
B) 80,and this indicates that the price level has increased by 80 percent since the base year. 
C) 125,and this indicates that the price level has increased by 25 percent since the base year. 
D) 125,and this indicates that the price level has increased by 125 percent since the base year. 
A) 80,and this indicates that the price level has decreased by 20 percent since the base year. 
B) 80,and this indicates that the price level has increased by 80 percent since the base year. 
C) 125,and this indicates that the price level has increased by 25 percent since the base year. 
D) 125,and this indicates that the price level has increased by 125 percent since the base year.

Question 5

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

Accepted Answer

A) 104.1 so prices are higher than in the base year. 
B) 104.1 so prices are lower than in the base year. 
C) 96.1 so prices are higher than in the base year. 
D) 96.1 so prices are lower than in the base year. 
A) 104.1 so prices are higher than in the base year. 
B) 104.1 so prices are lower than in the base year. 
C) 96.1 so prices are higher than in the base year. 
D) 96.1 so prices are lower than in the base year.

Question 6

Which of the following statements about GDP is correct?

Accepted Answer

A) Nominal GDP values production at current prices,whereas real GDP values production at constant prices. 
B) Nominal GDP values production at constant prices,whereas real GDP values production at current prices. 
C) Nominal GDP values production at market prices,whereas real GDP values production at the cost of the resources used in the production process. 
D) Nominal GDP values production at the cost of the resources used in the production process,whereas real GDP values production at market prices. 
A) Nominal GDP values production at current prices,whereas real GDP values production at constant prices. 
B) Nominal GDP values production at constant prices,whereas real GDP values production at current prices. 
C) Nominal GDP values production at market prices,whereas real GDP values production at the cost of the resources used in the production process. 
D) Nominal GDP values production at the cost of the resources used in the production process,whereas real GDP values production at market prices.

Question 7

Which of the following is not a correct statement about the growth of real GDP in the U.S.economy?

Accepted Answer

A) Real GDP in 2009 was almost four times its 1965 level. 
B) Growth was steady between 1965 and 2009. 
C) Continued growth in real GDP enables the typical American to enjoy greater economic prosperity than his or her parents and grandparents did. 
D) The output of goods and services produced grew on average about 3 percent per year between 1965 and 2009. 
A) Real GDP in 2009 was almost four times its 1965 level. 
B) Growth was steady between 1965 and 2009. 
C) Continued growth in real GDP enables the typical American to enjoy greater economic prosperity than his or her parents and grandparents did. 
D) The output of goods and services produced grew on average about 3 percent per year between 1965 and 2009.

Question 8

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion,what was the GDP deflator?

Accepted Answer

A) 87.5. 
B) 114.3. 
C) 400. 
D) 896. 
A) 87.5. 
B) 114.3. 
C) 400. 
D) 896.

Question 9

Suppose an economy's production consists only of corn and soybeans.In 2010,20 bushels of corn are sold at $4 per bushel and 10 bushels of soybeans are sold at $2 per bushel.In 2009,the price of corn was $2 per bushel and the price of soybeans was $1 per bushel.Using 2009 as the base year,it follows that,for 2010,

Accepted Answer

A) nominal GDP is $50,real GDP is $100,and the GDP deflator is 50. 
B) nominal GDP is $50,real GDP is $100,and the GDP deflator is 200. 
C) nominal GDP is $100,real GDP is $50,and the GDP deflator is 50. 
D) nominal GDP is $100,real GDP is $50,and the GDP deflator is 200. 
A) nominal GDP is $50,real GDP is $100,and the GDP deflator is 50. 
B) nominal GDP is $50,real GDP is $100,and the GDP deflator is 200. 
C) nominal GDP is $100,real GDP is $50,and the GDP deflator is 50. 
D) nominal GDP is $100,real GDP is $50,and the GDP deflator is 200.

Question 10

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009.It also reported a GDP deflator of 100 in 2010 and 105 in 2009.Between 2009 and 2010,

Accepted Answer

A) real output and the price level both rose. 
B) real output rose and the price level fell. 
C) real output fell and the price level rose. 
D) real output and the price level both fell. 
A) real output and the price level both rose. 
B) real output rose and the price level fell. 
C) real output fell and the price level rose. 
D) real output and the price level both fell.

Question 11

Which of the following is the correct formula for the GDP deflator?

Accepted Answer

A)    . 
B)    . 
C)    . 
D)    . 
A)    . 
B)    . 
C)    . 
D)    .

Question 12

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion,what was the GDP deflator?

Accepted Answer

A) 25. 
B) 40. 
C) 250. 
D) 400. 
A) 25. 
B) 40. 
C) 250. 
D) 400.

Question 13

If total spending rises from one year to the next,then which of the following could not be true?

Accepted Answer

A) the economy is producing a smaller output of goods and services,and goods and services are selling at higher prices. 
B) the economy is producing a larger output of goods and services,and goods and services are selling at lower prices. 
C) the economy is producing a larger output of goods and services,and goods and services are selling at higher prices. 
D) the economy is producing a smaller output of goods and services,and goods and services are selling at lower prices. 
A) the economy is producing a smaller output of goods and services,and goods and services are selling at higher prices. 
B) the economy is producing a larger output of goods and services,and goods and services are selling at lower prices. 
C) the economy is producing a larger output of goods and services,and goods and services are selling at higher prices. 
D) the economy is producing a smaller output of goods and services,and goods and services are selling at lower prices.

Question 14

Which of the following statements about nominal GDP and real GDP is correct?

Accepted Answer

A) Nominal GDP is a better gauge of economic well-being than real GDP. 
B) Real GDP is a better gauge of economic well-being than nominal GDP. 
C) Real GDP and nominal GDP are equally good measures of economic well-being. 
D) Neither nominal nor real GDP provide a measure of economic well-being. 
A) Nominal GDP is a better gauge of economic well-being than real GDP. 
B) Real GDP is a better gauge of economic well-being than nominal GDP. 
C) Real GDP and nominal GDP are equally good measures of economic well-being. 
D) Neither nominal nor real GDP provide a measure of economic well-being.

Question 15

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same,which would rise?

Accepted Answer

A) both real GDP and nominal GDP. 
B) real GDP but not nominal GDP. 
C) nominal GDP but not real GDP. 
D) neither nominal GDP nor real GDP. 
A) both real GDP and nominal GDP. 
B) real GDP but not nominal GDP. 
C) nominal GDP but not real GDP. 
D) neither nominal GDP nor real GDP.

Question 16

If nominal GDP is $10 trillion and real GDP is $12 trillion,then the GDP deflator is

Accepted Answer

A) 83.33,and this indicates that the price level has decreased by 16.67 percent since the base year. 
B) 83.33,and this indicates that the price level has increased by 83.33 percent since the base year. 
C) 120,and this indicates that the price level has increased by 20 percent since the base year. 
D) 120,and this indicates that the price level has increased by 120 percent since the base year. 
A) 83.33,and this indicates that the price level has decreased by 16.67 percent since the base year. 
B) 83.33,and this indicates that the price level has increased by 83.33 percent since the base year. 
C) 120,and this indicates that the price level has increased by 20 percent since the base year. 
D) 120,and this indicates that the price level has increased by 120 percent since the base year.

Question 17

Changes in the GDP deflator reflect

Accepted Answer

A) only changes in prices. 
B) only changes in the amounts being produced. 
C) both changes in prices and changes in the amounts being produced. 
D) neither changes in prices nor changes in the amounts being produced. 
A) only changes in prices. 
B) only changes in the amounts being produced. 
C) both changes in prices and changes in the amounts being produced. 
D) neither changes in prices nor changes in the amounts being produced.

Question 18

Nominal GDP will definitely increase when

Accepted Answer

A) prices increase and output increases. 
B) prices increase and output decreases. 
C) prices decrease and output increases. 
D) All of the above are correct. 
A) prices increase and output increases. 
B) prices increase and output decreases. 
C) prices decrease and output increases. 
D) All of the above are correct.

Question 19

If in some year nominal GDP was $18 billion and the GDP deflator was 120,what was real GDP?

Accepted Answer

A) $6.7 billion. 
B) $15 billion. 
C) $21.6 billion. 
D) $38 billion. 
A) $6.7 billion. 
B) $15 billion. 
C) $21.6 billion. 
D) $38 billion.

Question 20

The GDP deflator is the ratio of

Accepted Answer

A) real GDP to nominal GDP multiplied by 100. 
B) real GDP to the inflation rate multiplied by 100. 
C) nominal GDP to real GDP multiplied by 100. 
D) nominal GDP to the inflation rate multiplied by 100. 
A) real GDP to nominal GDP multiplied by 100. 
B) real GDP to the inflation rate multiplied by 100. 
C) nominal GDP to real GDP multiplied by 100. 
D) nominal GDP to the inflation rate multiplied by 100.

Exam 10: Measuring a Nations Income: Real Versus Nominal GDP

The inflation rate in year 2 equals

If in some year real GDP was $25 billion and the GDP deflator was 68,what was nominal GDP?

Much of macroeconomics attempts to explain

If nominal GDP is $10 trillion and real GDP is $8 trillion,then the GDP deflator is

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

Which of the following statements about GDP is correct?

Which of the following is not a correct statement about the growth of real GDP in the U.S.economy?

If in some year nominal GDP was $28 trillion and real GDP was $32 trillion,what was the GDP deflator?

A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009.It also reported a GDP deflator of 100 in 2010 and 105 in 2009.Between 2009 and 2010,

Which of the following is the correct formula for the GDP deflator?

If in some year nominal GDP was $10 trillion and real GDP was $4 trillion,what was the GDP deflator?

If total spending rises from one year to the next,then which of the following could not be true?

Which of the following statements about nominal GDP and real GDP is correct?

If the prices of all goods and services produced in the economy rose while the quantity of all goods and services stayed the same,which would rise?

If nominal GDP is $10 trillion and real GDP is $12 trillion,then the GDP deflator is

Changes in the GDP deflator reflect

Nominal GDP will definitely increase when

If in some year nominal GDP was $18 billion and the GDP deflator was 120,what was real GDP?

The GDP deflator is the ratio of

Ten Principles of Economics

Ten Principles of Economics: How People Make Decisions

Ten Principles of Economics: How People Interact

Ten Principles of Economics: How the Economy As a Whole Works

Ten Principles of Economics: Part A

Ten Principles of Economics: Part B

Thinking Like an Economist

Thinking Like an Economist: The Economist As Scientist

Thinking Like an Economist: The Economist As Policy Adviser

Thinking Like an Economist: Why Economists Disagree

Thinking Like an Economist: Lets Get Going

Thinking Like an Economist: Graphing a Brief Review

Thinking Like an Economist: Part A

Thinking Like an Economist: Part B

Interdependence and the Gains From Trade

Interdependence and the Gains From Trade: A Parable for the Modern Economy

Interdependence and the Gains From Trade: Comparative Advantage the Driving Force of Specialization

Interdependence and the Gains From Trade: Applications of Comparative Advantage

Interdependence and the Gains From Trade: Conclusion

Interdependence and the Gains From Trade: Part A

Interdependence and the Gains From Trade: Part B

The Market Forces of Supply and Demand

The Market Forces of Supply and Demand:Markets and Competition

The Market Forces of Supply and Demand: Demand

The Market Forces of Supply and Demand: Supply

The Market Forces of Supply and Demand: Supply and Demand Together

The Market Forces of Supply and DemandConclusion How Prices Allocate Resources

The Market Forces of Supply and Demand: Part A

The Market Forces of Supply and Demand: Part B

Elasticity and Its Applications

Elasticity and Its Applications: The Elasticity of Demand

Elasticity and Its Applications: The Elasticity of Supply

Elasticity and Its Applications: Three Applications of Supply,demand,and Elasticity

Elasticity and Its Applications: Part A

Elasticity and Its Applications: Part B

Supply Demand and Government Policies

Supply Demand and Government Policies: Controls on Prices

Supply Demand and Government Policies: Taxes

Supply Demand and Government Policies: Part A

Supply Demand and Government Policies: Part B

Consumers Producers and the Efficiency of Markets

Consumers Producers and the Efficiency of Markets: Consumer Surplus

Consumers Producers and the Efficiency of Markets: Producer Surplus

Consumers Producers and the Efficiency of Markets: Market Efficiency

Consumers Producers and the Efficiency of Markets: Conclusion Market Efficiency and Market Failure

Consumers Producers and the Efficiency of Markets: Part A

Consumers Producers and the Efficiency of Markets: Part B

Application the Cost of Taxation

Application the Cost of Taxation: The Deadweight Loss of Taxation

Application the Cost of Taxation: The Determinants of the Deadweight Loss

Application the Cost of Taxation: Deadweight Loss and Tax Revenue As Taxes Vary

Application the Cost of Taxation: Conclusion

Application the Cost of Taxation: Part A

Application the Cost of Taxation: Part B

Application International Trade

Application International Trade: The Determinants of Trade

Application International Trade: The Winners and Losers From Trade

Application International Trade: The Arguments for Restricting Trade

Application International Trade: Conclusion

Application International Trade: Part A