Economics 1B Quiz 4 S2011

Economics 1B Quiz 4 S2011 - Economics 1B Quiz #4 Department...

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Economics 1B Quiz #4 Department of Economics Professor Siegler UC Davis Spring 2011 1) Which of the following statements is true? A) If real GDP grows faster than population, then real GDP per capita will decrease. B) If real GDP grows slower than population, then real GDP per capita will increase. C) If real GDP and population grow at the same rate, then real GDP per capita will remain constant. D) All of the above. Answer: C 2) If prices continue to increase, but do so at a slower rate of increase, then the economy is experiencing: A) deflation. B) stagflation. C) disinflation. D) hyperinflation. Answer: C 3) Suppose that the hypothetical economy of Aggie experienced in 2011 a negative real interest rate of -2 percent, with a corresponding inflation rate of 12 percent. What must have been the nominal interest rate in Aggie during 2011? A) 14 percent B) 12 percent C) -14 percent D) 10 percent Answer: D 4) Potential GDP is A) a measure of the short-run movements in real GDP. B) the maximum amount of real GDP an economy can produce. C) another name for aggregate demand. D) the long-run upward trend in real GDP. Answer: D 5) Joe builds himself a garage in 2011 that is valued at $25,000. To build the garage, he purchased new materials that year for a total cost of $15,000. The change in nominal GDP is this case would be: A) an increase of $40,000. B) an increase of $15,000. C) an increase of $25,000. D) an increase of $10,000. Answer: B
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6) For a hypothetical economy in a given year, GDP equaled $1,171, consumption equaled $482, investment equaled $286, goods and services exported equaled $198, and goods and services imported equaled $57. What did government spending equal? A) $403
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Economics 1B Quiz 4 S2011 - Economics 1B Quiz #4 Department...

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