1) Suppose $500,000 of steel is produced in Detroit by Kobe Steel (a
Japan owned company) and $600,000 of steel is produced in Tokyo
by U.S. Steel (a U.S. owned company). If Ford motor in Detroit uses
$400,000 of the Kobe Steel and imports $300,000 of the U.S. Steel
all to use in the manufacture of $1,200,000 of cars, then these
activities will contribute _____ to U.S. GDP.
2) To aggregate output of 4000 bushels of apples, of 5000 bushels of
pears, and of 3000 bushels of oranges, economists add together the
_______ of the three products.
A) dollar value
B) unit profit
E) average labor productivity
3) Which of the following is NOT a final good?
A) Fresh vegetables purchased by a restaurant
B) A new house purchased by a family
C) New clothing purchased by a college student
D) Fresh flowers purchased by a husband
E) A new table purchased by a grocery store
4) If, in a given period, the rate of inflation turns out to be 7% while
lenders and borrowers (who are parties to a fixed money rate loan)
anticipated 10%, the effect is _____.
A) the real payments of borrowers will be higher than expected, but
their nominal payments will be as expected