chapter_7test

# chapter_7test - 1 Nominal GDP differs from real GDP because...

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1. Nominal GDP differs from real GDP because: A) Real GDP is adjusted for changes in the price level Feedback: correct B) Nominal GDP is based on constant prices C) Nominal GDP is adjusted for changes in the price level D) Real GDP is based on current prices Points Earned: 5.0/5.0 Correct Answer(s): A 2. Assume an economy that is producing only one product and that year 3 is the base year. Output and price data for a five-year period are as follows. Answer the next question(s) on the basis of these data. Refer to the above data. The nominal GDP for year 4 is: A) \$55. B) \$40. C) \$35. D) \$49. Feedback: correct Points Earned: 5.0/5.0 Correct Answer(s): D 3. Suppose that GDP was \$200 billion in year 1 and that all other components of expenditures remained the same in year 2 except that business inventories fell by \$10 billion. GDP in year 2 is: A) \$200 billion. B) \$180 billion. C) \$190 billion. Feedback:

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D) \$210 billion. Points Earned: 5.0/5.0 Correct Answer(s): C 4. Which of the following transactions would be included in GDP? A) Mary buys a used book for \$5 at a garage sale. B) Nick buys \$5000 worth of stock in Microsoft. C) Olivia receives a tax refund of \$500. D) Peter buys a newly constructed house. Feedback: correct Points Earned: 5.0/5.0 Correct Answer(s): D 5. Assume an economy that is producing only one product. Output and price data for a three-year period are as follows. Answer the next question(s) on the basis of these data. Refer to the above data. If year 2 is chosen for the base year, in year 3 nominal GDP and real GDP, respectively, are: A) \$30 and \$5. B) \$180 and \$30.
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chapter_7test - 1 Nominal GDP differs from real GDP because...

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