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Homework answers / question archive / University of Colorado, Boulder Chapter 10 Multiple Choice 1)GDP is used to monitor the performance of the overall economy but is not the single best measure of a society’s economic well-being
University of Colorado, Boulder Chapter 10 Multiple Choice 1)GDP
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2. Which of the following statements about GDP is correct?
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3. Which of the following is a way to compute GDP?
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4. Estimates of the values of which of the following non-market goods or services are included in GDP? a. the value of unpaid housework
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5. Tim mows the yard for his neighbors. He spends $1 on gas and charges them $20 for each lawn he mows. What’s the total contribution to GDP each time Tim mows a yard? a. $1
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6. Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car |
dealership or the purchase of an antique rocking chair by a person at a yard sale, are
produced in the current year.
____ 7. Which of the following items is included in U.S. GDP?
d. None of the above is included in U.S. GDP.
____ 8. GDP is equal to
____ 9. The consumption component of GDP includes spending on
____ 10. A U.S. firm produces nail guns in the first quarter of 2010 and adds them to its inventory. In the second quarter of 2010 the firm sells the nail guns to a U.S. construction company. In which quarter(s) does(do) these transactions raise investment? a. the first and the second
____ 11. Transfer payments are
____ 12. Consider the following three items of spending by the government: (i) the federal government pays a $500 unemployment benefit to an unemployed person; (ii) the federal government makes a $2,000 salary payment to a Navy lieutenant; (iii) the city of Bozeman, Montana makes a $10,000 payment to ABC Lighting Company for street lights in Bozeman. Which of these payments contributes directly to government purchases in the national income accounts? a. only item (i)
____ 13. Net exports equal
____ 14. In the economy of Ukzten in 2010, consumption was $6000, exports were $1000, GDP was $10,000, government purchases were $2000, and imports were $600. What was Ukzten’s investment in 2010? a. $1400
____ 15. In the economy of Ukzten in 2010, consumption was $4000, exports were $800, GDP was $9500, imports were $200, and investment was $1000. What were Ukzten’s government purchases in 2010? a. $3700
____ 16. In the economy of Ukzten in 2010, consumption was $1000, GDP was $1950, government purchases were
$500, and investment was $700. What were Ukzten’s net exports in 2010? a. -$250
____ 17. In the economy of Ukzten in 2010, consumption was $5300, GDP was $8800, government purchases were
$1800, imports were $500, and investment was $2000. What were Ukzten’s exports in 2010? a. -$800
____ 18. If in some year nominal GDP was $10 trillion and real GDP was $4 trillion, what was the GDP deflator ? a. 25
____ 19. If in some year nominal GDP was $28 trillion and real GDP was $32 trillion, what was the GDP deflator ? a. 87.5
____ 20. Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,
Table 23-4
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008.
Prices and Quantities
Year |
Price of Cereal |
Quantity of Cereal |
Price of Milk
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Quantity of Milk |
2008 |
$4.00 |
90 |
$1.50 |
150 |
2009 |
$4.00 |
100 |
$2.00 |
180 |
2010 |
$5.00 |
120 |
$2.50 |
200 |
2011 |
$6.00 |
150 |
$3.50 |
200 |
____ 21. Refer to Table 23-4. This country’s output grew
Table 23-5
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last several years are shown below. The base year is 2009.
Prices and Quantities
Year |
Price of Movies |
Quantity of Movies |
Price of Popcorn |
Quantity of Popcorn |
2008 |
$10.00 |
400 |
$5 |
800 |
2009 |
$11.00 |
500 |
$4 |
900 |
2010 |
$12.00 |
600 |
$5 |
1000 |
2011 |
$12.00 |
600 |
$6 |
900 |
____ 22. Refer to table 23-5 In which year was this country’s real GDP highest? a. 2008
____ 23. Refer to table 23-5 What was this country’s real GDP in 2010?
Table 23-6
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2009.
Prices and Quantities
Year Price of Quantity of Price of Quantity of Waffles Waffles Pancakes Pancakes
____ 24. Refer to Table 23-6. In 2008, this country's GDP deflator was a. 75.
____ 25. Refer to Table 23-6. In 2010, this country's GDP deflator was a. 77.8.
____ 26. Refer to Table 23-6. This country's inflation rate from 2010 to 2011 was a. 15.2%.
____ 27. GDP is not a perfect measure of well-being; for example,
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