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Unformatted text preview: l unemployment D. Structural unemployment and frictional unemployment 9. According to the definition of GDP as sum of expenditures, which of the following situation will increase the GDP of US? 2 A. B. C. D. US Imports from overseas increase Consumption decreases US Government purchases more airplanes for war related effort Exports of US decreases due to higher tariffs 10. In the IS‐MP diagram, what happens if the marginal product of capital increases in the short run? A. IS curve shifts to the right B. IS curve shifts to the left C. IS curve shifts to the right and MP curve shifts downward simultaneously D. None of them above 3 Problem 1 (2 points each part) Consider a simple economy that produces the following final goods with the described prices and quantities: 2013 2014 Good Quantity of Cars 12 13 Quantity of Shirts 1000 1010 Quantity of Computers 230 300 Price of Cars 10,000 $ 10,500 $ Price of Shirts 10$ 11$ Price of Computers 300$ 270$ a) Calculate the nominal GDP of this economy in 2013 and 2014 b) Calculate the growth rate of nominal GDP between 2013 and 2014 c) Calculate the growth rate of real GDP between 2013 and 2014 using the chain‐weighted price index. d) Calculate rate of inflat...
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