Blue Exam 1 - Econ 252 - Fall 2011

Blue Exam 1 - Econ 252 - Fall 2011 - 1 Suppose that the...

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1. Suppose that the imaginary nation of Pennyton experiences inflation in prices from 2000 to 2001 and again from 2001 to 2002. The GDP deflator was 60 in 2000 and 80 in 2002. Which of the following could have been the GDP deflator in 2001? a) 50 b) 70 c) 90 d) 110 For the following 3 questions, consider the imaginary nation of Athletia which produces baseballs, soccerballs, and footballs. It produces the following quantities and they are sold at the corresponding prices in 2007, 2008, and 2009. Baseballs Soccerballs Footballs Price Quantity Price Quantity Price Quantity 2007 $1 100 $3 25 $2 20 2008 $2 75 $5 50 $3 30 2009 $2 50 $4 60 $4 35 2. Using the year 2007 as the base year for prices, real GDP in 2009 is: 3. Using the year 2007 as the base year for prices, the GDP deflator in 2008 is approximately : 4. The rate of inflation in Athletia from 2008 to 2009 was approximately _______ percent. 5. Which of the following would not be included in the calculation of GDP? a) I pay an accountant living in West Lafayette, Indiana, to have my taxes done. b) My American friend Claire grew figs in Greece over the summer and sold them there. c) One of your classmates buys a chair made in Indiana but is sold by the Swedish company Ikea. d) The city of Lafayette pays a man to clean the street. 6. Lopresti is from Italy, and he is working in the US as a professor. His wages will be: 7. If a country has a comparative advantage in the production of a good, then: 8. Over the past several years in the economy of Smithland nominal GDP has been growing at a rate of 2 percent per year and Real GDP has been growing at a rate of 4 percent per year. We can conclude from this information that Exam I – Blue Version Economics 252 – Fall 2011
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