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Unformatted text preview: in 2005 is $83,500 and real GDP in 2006 is $93,500. D. Real GDP in 2005 is $83,500 and real GDP in 2006 is $75,850. 13. What is the GDP deflator in both years? A. The GDP deflator in 2005 is 100 and the GDP deflator in 2006 is 123.3. B. The GDP deflator in 2005 is 81.4 and the GDP deflator in 2006 is 100. C. The GDP deflator in 2005 is 100 and the GDP deflator in 2006 is 100. D. The GDP deflator in 2005 is 81.4 and the GDP deflator in 2006 is 123.3. [Use the following information to answer questions 14–15.] Nominal GDP
Real GDP GDP Deflator 2007 1,200 1,000 2008 1,500 140 14. The inflation rate from 2007 to 2008 was _______. A. 20% B. 40% C. 25% D. 17% E. 32% 15. Real GDP in 2008 is _______. A. $1,071 B. $1,360 C. $1,640 D. $1,154 16. Denise decides to spend three hours working overtime rather than watching a video with her friends. She earns $10 an hour. Her opportunity cost of working is A. the $30 she earns working. B. the $30 minus the enjoyment she would have received from watching the video. C. the enjoyment she would have received had she watched the video. D. nothing, since she would have received less than $30 of enjoyment from the video. 17. Which of the following would NOT affect demand in the market for cheese? A. The price of wine, a complement of cheese, increases. B. The price of milk, a key ingredient in cheese, decreases. C. The population in the area where the cheese is sold decreases. D. Adds for cheese have increased the popularity of cheese. 18. Consider the market for picture frames. Wood is a major component in the production of picture frames. If the price of wood decreases, what happens to the equilibrium in the picture frame market? A. price falls; quantity falls B. price rises; quantity falls C. price falls; quantity rises D. price rises; quantity rises 19. If an economy is producing more goods and services at a time when overall prices are rising, A. real GDP is growing faster than nominal GDP. B. real GDP is growing slower than nominal GDP. C. real GDP...
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- Fall '08