ecn101_m_w08_ans

ecn101_m_w08_ans - Part 1: Multiple Choices (2 points each)...

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Part 1: Multiple Choices (2 points each) 1. The total expenditure of everyone in the economy is exactly equal to the total: a. expenditure on the economy’s output of goods and services. b. consumption expenditures of everyone in the economy. c. expenditure of all business in the economy. d. government expenditures. Answer: a 2. To compute the value of GDP: a. goods and services are valued at market prices. b. the sale of used goods is included. c. production for inventory is not included. d. goods and services are valued by weight. Answer: a 3. Since GDP includes only the additions to income, not transfers of assets, ________are not included in the computation of GDP: a. final goods. b. used goods. c. consumption goods. d. goods produced for inventory. Answer: b 4. When a firm sells a product of inventory, GDP: a. increases. b. decreases. c. is not changed. d. increases or decreases, depending on the year the product was produced. Answer: c 5. Imputed valued included in GDP are the: a. market prices of goods and services. b. estimated value of goods and services that are not sold in the marketplace. c. price of goods and services measured in constant prices. d. price of goods and services measured in current prices. Answer: b 6. Assume that apples cost $0.50 in 2002 and $1 in 2007, whereas oranges cost $1 in 2002 and $1.50 in 2007. If 4 apples were produced in 2002 and 5 in 2007, whereas 3 oranges were produced in 2002 and 5 in 2007, then the GDP deflator in 2007, using a base year of 2002, was approximately: a. 1.5. b. 1.7. c. 1.9. d. 2.0. Answer: b 7. An increase in the price of goods bought by firms and the government will show up in: a. the CPI but not in the GDP deflator.
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b. the GDP deflator but not in the CPI. c. both the CPI and the GDP deflator. d. neither the CPI nor the GDP deflator.
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This note was uploaded on 04/17/2008 for the course ECON 101 taught by Professor Miyanishi during the Winter '08 term at UC Davis.

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ecn101_m_w08_ans - Part 1: Multiple Choices (2 points each)...

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