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: a) \$160 b) \$300 c) \$380 d) \$480 3. Using the year 2007 as the base year for prices, the GDP deflator in 2008 is approximately : a) 490 b) 285 c) 172 d) 58 4. The rate of inflation in Athletia from 2008 to 2009 was approximately _______ percent. a) -12 b) -7 c) 60 d) 72 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: a) a part of GDP of US and GNP of the US. b) a part of GDP of US and GNP of Italy. c) a part of GDP of Italy and GNP of the US. d) a part of GDP of Italy and GNP of Italy. 7. If a country has a comparative advantage in the production of a good, then: a) that country also has an absolute advantage in producing that good. b) that country has a lower opportunity cost in the production of that good. c) that should allow another country to specialize in the production of that good. d) consumers in that country become worse off. 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 a) prices have been rising in Smithland at a rate of 2 percent per year over this time period. b) Smithland has been experiencing price deflation over this period of time. c) an economic downturn, or recession, is creating rising unemployment in Smithland. This has slowed growth of nominal GDP relative to Real GDP. Exam I – Blue Version Economics 252 – Fall 2011

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d) Real GDP in Smithland is growing at an above average rate. 9.
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## This note was uploaded on 03/28/2012 for the course ECON 252 taught by Professor Robertholand during the Spring '08 term at Purdue.

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

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