midterm - Econ 203 100 Principles of Macroeconomics (Summer...

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Econ 203 100 Principles of Macroeconomics (Summer I 2009)------Midterm Test Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 1. If GDP rises, a. income and production must both rise. b. income and production must both fall. c. income must rise, but production may rise or fall. d. production must rise, but income may rise or fall. ____ 2. Which of the following non-market goods or services is included as an estimate in U.S. GDP? a. the value of unpaid housework b. the value of vegetables that people grow in their gardens c. the estimated rental value of owner-occupied homes d. None of the above are correct. ____ 3. Over time people have come to rely more on market-produced goods and less on goods that they produce for themselves. For example people eat at restaurants relatively more and prepare their own meals at home relatively less. By itself this change would a. make GDP fall over time. b. not make any change in GDP over time. c. make GDP rise over time. d. change GDP, but in an uncertain direction. ____ 4. Goods that go into inventory and are not sold during the current period are a. counted as intermediate goods and so are not included in current period GDP. b. counted in current GDP only if the firm that produced them sells them to another firm. c. included in current period GDP as inventory investment. d. included in current period GDP as consumption. ____ 5. Which of the following is counted in GDP? a. the estimated value of housework b. the value of illegally produced goods and services c. the value of newly issued stocks and bonds d. None of the above are correct. ____ 6. If a U.S. household buys a $75 handbag from Italy, U.S. consumption increases by $75, U.S. a. imports increase by $75, and U.S. GDP increases by $75. b. imports increase by $75, but U.S. GDP is unaffected. c. imports are unaffected, and U.S. GDP is unaffected. d. exports increase by $75, and U.S. GDP increases by $75. ____ 7. Real GDP a. evaluates current production at current prices. b. evaluates current production at the prices that prevailed in some specific year in the past. c. is not a valid measure of the economy's performance, since prices change from year to year. d. is a measure of the value of goods only, hence, it excludes the value of services. ____ 8. If a small country has current nominal GDP of $20 billion and a GDP deflator of 50, what is its real GDP? a. $100 billion b. $40 billion c. $10 billion d. $4 billion ____ 9. If a country reported a nominal GDP of 115 billion in 2002 and 125 billion in 2001 and reported a GDP deflator of 85 in 2002 and a deflator of 100 in 2001, then from 2001 to 2002 real output
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a. and prices both rose. b. rose and prices fell.
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This note was uploaded on 04/12/2010 for the course ECON econ1000 taught by Professor Abena during the Spring '10 term at Carleton CA.

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midterm - Econ 203 100 Principles of Macroeconomics (Summer...

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