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Homework answers / question archive / 14) If total spending rises from one year to the next, then A the economy must be producing a larger output of goods and services
14) If total spending rises from one year to the next, then
A the economy must be producing a larger output of goods and services.
B goods and services must be selling at higher prices.
C either the economy must be producing a larger output of goods and services, or goods and services must be selling at higher prices, or both.
D employment or productivity must be rising.
13.) The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result,
A U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP is unaffected.
B U.S. government purchases increase by $30,000; U.S. net exports are unaffected; and U.S. GDP increases by $30,000.
C U.S. government purchases, net exports, and GDP are unaffected.
D U.S. government purchases are unaffected; U.S. net exports decrease by $30,000; and U.S. GDP decreases by $30,000.
15.) Which of the following statements about GDP is correct?
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.
9.) If you buy a burger and fries at your favorite fast food restaurant,
A then neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant.
B then GDP will be higher, but consumption spending will be unchanged.
C then GDP will be unchanged, but consumption spending will be higher.
D then both GDP and consumption spending will be higher.
14. Option C
(Increase in total spending can either mean increase in output or higher prices or both.)
13. Option A
(Government spending increases by $30,000 on hiring Turkish citizen, and its imports increase by $30,000 so net exports decrease by $30,000. Thus, GDP is unaffected.)
15. Option A
(Nominal GDP is value of goods at current prices and real GDP is value of goods at constant prices.)
9. Option D
(Due to purchase for consumption, GDP and consumption spending will increase.)
