Sample questions - 1 Suppose nominal GDP increases in a...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
1) Suppose nominal GDP increases in a given year. Based on this information, we know with certainty that: A) real output has increased. B) the price level (GDP deflator) has increased. C) real output and the price level (GDP deflator) have both increased. D) either real output or the price level (GDP deflator) have increased. E) real output has decreased and the price level has increased. Answer: D 2) If nominal GDP rises from $10 trillion to $12 trillion, while the GDP deflator rises from 2.0 to 2.2, the percentage change in real GDP is: 3) Suppose that for the year 2003, a company spends $200 million on intermediate goods and $400 million on wages, with no other expenses. Also assume that its total sales are $900 million. The value added by this company is: 4) Suppose nominal GDP in 2003 increased by 6% (over its previous level in 2002). Given this information, we know with certainty that:
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
5) When disposable income is zero, we know that: A) consumption must be zero. B) saving must be zero. C) saving equals investment. D) saving is negative. E) the marginal propensity to consume must be zero. Answer: D 6) If C = 100 + .5Y D , what increase in government spending would raise GDP by 1000? 7) An increase in the marginal propensity to consume from .5 to .7 will cause:
Image of page 2
8) When C = c 0 + c 1 Y D , an increase in c 0 will cause which of the following to increase? 9) The interest rate will increase as a result of which of the following events? A) a decrease in income B) an open market purchase of bonds by the central bank C) an increase in income D) all of the above E) none of the above Answer: C
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern