Eco 156 Practice Test 1 1. The nominal rate of interest is defined as: a. One mi
ID: 1115461 • Letter: E
Question
Eco 156 Practice Test 1 1. The nominal rate of interest is defined as: a. One minus the real rate of interest b. The real rate of interest minus inflation rate. c. The real rate of interest plus inflation rate. d. The real interest rate minus the ratc of inflation 2. The concept of the total value of all final goods and services produced by U.S. firms regardless of their locations is called a. Gross National Product (GNP b. Gross Domestic Product (GDP c. Gross State Product (GSP) d. Net National Income 3. Which of the following items would not be included in the counting of a country's GDP? a. An automobile b. An automobile tire on a new car c. A man's shirt d. A loaf of bread 4. All of the following would be escluded from GDP except: a. The production of this software package b. The sale of IBM stock c. The purchase of a used car from your uncle d. The receipt of your monthly allowance from your family 5. The allocation approach to mcasuring Giross Domestic Product would include accounting for all of the follow ing except: a. dividends b, investment c. wage d. rent 6. The price index used to deflate nominal GDP is called: a. consumer price index. b. Producer price index. c. GDP deflator d. Core price index. 7. If the price of a basket was $19 in 1980 and the same basket of goods was $57 in 1991. the price indexes for 1980 and 1991 would be: a. 100. 150 b. 100. 200 c 100, 250 d. 100, 300 8. If nominal GDP is So60 billion and the GDP Price Index for the current year is 110, real GDP would be: . $600. b. $660 c. $550 d. $500. 9. The phase of the business cycle in which real domestic output decreases is called a. the pealk b. the recession. c. The recovery d. The troughExplanation / Answer
1) C: the real interest rate plus the inflation.
A nominal interest rate is the rate that does not take inflation into account while the real interest rate is adjusted for inflation.
2) A: GNP
Total Value of all final goods and services produced by a firm within the nation as well as in foreign countries constitute to be the gross national product of the country.
3) B: An automobile tire of a new car
In the calculation of a country's GDP, Intermediate consumption are always deducted in order to avoid double counting, thus the basic definition of GDP caculation requires counting of final outputs only.
4) B: The sale of IBM Stock
Sale of IBM stock is the actual source of revenue generation for the nation being the final produce, while others are either intermediate consumed good, second hand good or transfer payments.
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.