macro_tif1_ch07

D thepurchasing powerofadollarrises answer b diff2

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Unformatted text preview: final goods and services produced falls. B) The price level falls and the quantity of final goods and services produced falls. C) The price level rises and the quantity of final goods and services produced rises. D) The price level falls and the quantity of final goods and services produced rises. Answer: D Diff: 3 Type: MC Page Ref: To pic : 646-7/226-7 R S Analytical Objective: LO3: Discuss the difference between real GDP and nominal AACSB Coding: GDP Analytic Skills Special Feature: None 11. Which of the following could cause nominal GDP to increase, but real GDP to decrease? A) The price level rises and the quantity of final goods and services produced falls. B) The price level rises and the quantity of final goods and services produced rises. C) The price level falls and the quantity of final goods and services produced falls. D) The price level falls and the quantity of final goods and services produced rises. Answer: A Diff: 3 Type: MC Page Ref: To pic : 646-7/226-7 R S Analytical Objective: LO3: Discuss the difference between real GDP and nominal AACSB Coding: GDP Analytic Skills Special Feature: None 12. If real GDP in 2007 (using 2002 prices) is lower than nominal GDP of 2006, then A) prices in 2007 are lower than prices in 2006. B) real GDP in 2007 is larger than real GDP in 2006. C) nominal GDP in 2007 equals nominal GDP in 2006. D) prices in 2007 are higher than prices in 2006. Answer: A Diff: 1 Type: MC Page Ref: To pic : 646-8/226-8 R S Conceptual Objective: LO3: Discuss the difference between real GDP and nominal AACSB Coding: GDP Reflective Thinking Special Feature: None 13. To examine how the total production of an economy has changed over time, it would be better to examine A) GDP at current prices. B) the GDP deflator. C) nominal GDP. D) real GDP. Answer: D Diff: 2 Type: MC Page Ref: To pic : 647/227 R S Conceptual Objective: LO3: Discuss the difference between real GDP and nominal AACSB Coding: GDP Reflective Thinking Special Feature: None 14. If prices in the economy rise, then A) the purchasing power of a dollar stays constant. B) the purchasing power of a dollar declines C) the purchasing power of a dollar cannot be determined. D) the purchasing power of a dollar rises. Answer: B Diff: 2 Type: MC Page Ref: To pic : 647/227 R S Conceptual Objective: LO3: Discuss the difference between real GDP and nominal AACSB Coding: GDP Reflective Thinking Special Feature: None 15. Real GDP will increase A) only if the quantity of final goods and services produced rises. B) if either the price level rises or the quantity of final goods and services produced rises. C) only if the price level falls. D) only if the price level rises. Answer: A Diff: 3 Type: MC Page Ref: To pic : 647-8/227-8 R S Conceptual Objective: LO3: Discuss the difference between real GDP and nominal AACSB Coding: GDP Reflective Thinking Special Feature: None 16. If nominal GDP is $5 trillion and real GDP is $4 trillion, the GDP deflator is A) 80. B) 125. C) 12.5. D) 800. Answer: B Diff: 2 Type: MC Page Ref: To pic : 648/228 G S Analytical Objective: LO3: Discuss the difference between real GDP...
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