Macro_Chapter_7_study_guide_questions_13e - Macro Chapter 7...

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Macro Chapter 7 study guide questions Multiple Choice Identify the choice that best completes the statement or answers the question. ____ 1. Real GDP refers to nominal GDP a. minus gifts to other countries. b. minus total unemployment compensation. c. adjusted for price changes. d. adjusted for unemployment changes. ____ 2. Assume that between 1995 and 2000 nominal GDP increased from $1,000 to $2,500, and the index of prices increased from 100 to 200. Which of the following expresses GDP for 2000 in terms of 1995 prices? a. $1,000 b. $1,250 c. $2,500 d. $5,000 ____ 3. Which of the following transactions would be counted toward this year's GDP? a. General Motors purchases 10,000,000 tires from Firestone. b. A 300-year-old painting is sold for $12 million. c. A street gang earns $2 million from selling illegal drugs. d. Your real estate agent earns $5,000 commission when you sell your 100-year-old house for $100,000. ____ 4. The consumer price index (CPI) and the GDP deflator are designed to measure the degree to which a. there have been changes in the proportions of national income generated by (and thus earned by) the rich relative to the poor. b. the cost of purchasing a bundle of goods has changed over time. c. consumption patterns have changed with time. d. consumer prices have risen over and above increases in worker wages. ____ 5. Which of the following would not be counted as part of this year's GDP? a. the increase in the value of an antique automobile that was restored this year b. the value of a new automobile at its sale price c. the value of a used car at its sale price d. a family's replacement of a worn-out washing machine with a new one ____ 6. Jim, a U.S. citizen, gets a summer job working in Germany. His summer earnings a. would count as part of U.S. GDP and German GNP. b. would count as part of U.S. GNP and German GDP. c. would count as part of U.S. GDP but would have no effect on Germany's GNP or GDP. d. would be double-counted, raising both U.S. GDP and German GDP.
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____ 7. Which of the following is not a problem or shortcoming of GDP? a.
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This document was uploaded on 11/01/2011 for the course ECO ECO2013 at FSU.

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Macro_Chapter_7_study_guide_questions_13e - Macro Chapter 7...

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