chapter 26 homework
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chapter 26 homework

Course Number: ECON 201, Spring 2010

College/University: Bowling Green

Word Count: 242

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1. If the annual inflation rate is 5 percent a year, about how many years will it take for the price level to double? A) 10 years B) 12 years C) 14 years D) 16 years 2. If the Consumer Price Index was 166.6 in one year and 172.2 in the next year, then the rate of inflation from one year to the next was: A) 3.4% B) 4.1% C) 5.4% D) 6.0% 3. If the average level of nominal income in a nation is $44,000 and the...

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If 1. the annual inflation rate is 5 percent a year, about how many years will it take for the price level to double? A) 10 years B) 12 years C) 14 years D) 16 years 2. If the Consumer Price Index was 166.6 in one year and 172.2 in the next year, then the rate of inflation from one year to the next was: A) 3.4% B) 4.1% C) 5.4% D) 6.0% 3. If the average level of nominal income in a nation is $44,000 and the price level index is 175, the average real income would be about: A) $18,857 B) $25,143 C) $44,000 D) $77,000 4. In Year 1, the price level was 120 and the average nominal income was $30,000. In Year 2, the price level was 125 and the average nominal level of income was $32,000. What happened to real income from Year 1 to Year 2? A) It fell by B) $400 It rose by $400 C) It rose by $600 D) It rose by $2,000 5. If the natural rate of unemployment was 6 percent, the current unemployment rate was 12 percent, and the nominal GDP was $4,000 billion, then according to Okun's law the economy would have sacrificed: A) $240 billion in potential output B) $480 billion in potential output C) $700 billion in potential output D) $840 billion in potential output 6. Only two resources, capital and labor, are used in an economy to produce an output of 600 million units. If the total cost of capital resources is $300 million and the total cost of labor resources is $100 million, then the perunit production costs in this economy are: A) $0.67 million B) $1.50 million C) $2.00 million D) $3.00 million

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