Question 1 Nominal GDP is GDP in a given year adjusted for inflation adjusted fo
ID: 1104305 • Letter: Q
Question
Question 1
Nominal GDP is GDP in a given year
adjusted for inflation
adjusted for anticipated inflation
valued in the prices of that year
valued in the prices of the base year
Question 2
Which of the following statements about the underground economy is true?
The underground economy in developing countries amounts to less that 10% of measured GDP
Most transactions that occurr in the underground economy are included in the calculations of the GDP
Excluding underground economy production from measured GDP causes errors in GDP growth estimates in the long run
Income that is earned but not reported as income for tax purposes is included in the calculations of GDP
Question 3
Which of the following items would be included in the U.S.’ GDP?
The value of a German camera brought back to the U.S. by a U.S. soldier, who had been stationed in Germany.
The output of a U.S. owned family farm in Kansas.
The value of clean air.
The value of imports to the U.S.
Question 4
In 2020 Bell-land produced the following items.
1. 2 Airplanes: $500,000 each
2. 200 lbs of oranges to be used to make commercial orange juice: $5 a pound
3. 100 cartons of orange juice at $2.00 a carton
4. 50 pairs of jeans at $50 a pair
5.100 police officer, each with a salary of $55,000 a year
The base year is 2010. In 2010 airplanes cost $490,000, a lbs. of oranges cost $5.50, a carton of orange juice cost $2.10, a pair of jeans cost $48 and a police officer's salary was $54,000
What was the nominal GDP for 2020, real GDP for 2020, the GDP deflator for 2020 and the GDP deflator for the base year?
Question 5
Which of the following is a final good?
Mustard in a deli.
Tin purchased by a can company.
A sweater purchased by a woman at Macy’s.
A and b
A, b, and c
Question 6
The GDP deflator in year 2 is 105, using year 1 as the base year. This means that, on average the cost of goods and services is
5% higher in year 2 than year 1
105% higher in year 2 than year 1
5% higher in year 1 than in year 2
105% higher in year 1 than in year 2
Question 7
The U.S.' average growth rate for this century is
2%
3.3%
0%
3%
Question 8
A GDP deflator of 112 means:
the overall price level is 12 percent higher than in the base year
the overall output increased by 12 percent since the base year
every price in the economy has gone up by 12 percent
the production of each good in the economy has increased by 12 percent
Question 9
Is it possible for a country's nominal GDP to increase and real GDP to decrease from one year to the next?
Yes, it would indicate a larger rise in prices relative to a decrease in output
No, since prices are held constant and that would be mathematically impossible
Yes, it would indicate a larger rise in output relative to a decrease in prices
No, since output is held constant and that would be mathematically impossible
Explanation / Answer
1. The correct answer is C.
2. The correct answers are C and D.
3. The correct answer is B.
4. Insufficient information.
5. Only A and C are final goods.
6. The correct answer is A.
7. The correct answer is B.
8. The correct answer is A.
9. The correct answer is A.
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