QUESTION 1 If in some year nominal GDP was $20 billion and real GDP was $8 billi
ID: 1163913 • Letter: Q
Question
QUESTION 1
If in some year nominal GDP was $20 billion and real GDP was $8 billion, what was the GDP deflator?
a.
25
b.
40
c.
250
d.
400
QUESTION 2
Transfer payments are
a.
not a part of GDP
b.
a part of GDP
c.
part of GDP sometimes
d.
none of the above
QUESTION 3
David sells five pounds of wheat for $10 to Puneet's flour mill. Puneet's flour mill converts it into flour and sells three pounds for $4.50 per pound. The remaining flour is converted into bread and sold for a total of $8.00 Taking these transactions into account, how much is added to GDP?
a.
$22.50
b.
$29.50
c.
$21.50
d.
$31.50
QUESTION 4
The country of Aruba produces only cakes and coffee. Quantities and prices of these goods for the last couple of years are shown below. The base year is 2012.
Year
Price of Cake
Quantity of Cake
Price of Coffee
Quantity of Coffee
2012
$ 4
100
$1.50
180
2013
$ 4
120
$ 2.00
200
2014
$ 5
150
$ 2.50
200
2015
$ 6
180
$ 3.50
240
a.
25
b.
40
c.
250
d.
400
Explanation / Answer
1. Ans: 250
Explanation:
GDP Deflator = (NGDP / RGDP) * 100 = (20 / 8) * 100 = 250
2. Ans: not a part of GDP
Explanation:
Because transfer payments are not final goods and services.
3. Ans: $21.50
Explanation:
GDP is the value of final goods and services. Here, the value of final goods = ($4.50 * 3) + $8 = $21.50.
4. What is the Question? Please mention, then only it can be answered.
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