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ECON252_Practice_Exam_1A_-_Chapters_1_2_4-8_KEY_

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Unformatted text preview: , this country’s A. nominal GDP was greater than real GDP, and the GDP deflator was equal to 120. B. nominal GDP was equal to real GDP, and the GDP deflator was equal to 100. C. nominal GDP was greater than real GDP, and the GDP deflator was more than 140. D. nominal GDP was greater than real GDP, and the GDP deflator was equal to 113. *** 25. This country’s inflation rate from 2010 to 2011 was _______ . A. 51% B. 110% C. 26% *** D. 77% 26. An increase in the price of hospital beds would affect _______ . A. the CPI but not the GDP deflator B. the GDP deflator but not the CPI *** C. both the CPI and the GDP deflator D. neither the CPI or the GDP deflator 27. The minimum wage was \$3.35/hr. in 1990 and is currently \$7.25/hr. If the CPI was 130 in 1990 and is 299 currently, what is the 1990 minimum wage in current dollars? A. \$7.71/hr *** B. \$10.02/hr C. \$6.95/hr D. \$8.04/hr E. [None of the above] 28. Wayne loans his friend \$10,000 for one year. At the end of the year, his friend pays him back \$11,000. If there was 3% inflation over that year, what was Wayne’s real rate of return on the loan? A. 3% B. 13% C. 10% D. 7% *** 29. If Starbucks increases the prices of all their coffee products, this would A. affect the GDP deflator, but not the CPI. B. affect the GDP deflator and the CPI. *** C. affect the CPI, but not the GDP deflator. D. not affect the GDP deflator or the CPI. 30. The measurement economists most often use to make comparisons between different countries’ well‐being is their _______ . A. CPI B. per capita GDP *** C. net exports D. inflation rate 31. A production point outside the production possibilities frontier is _______ and a point inside the frontier is _______ . A. inefficient; efficient B. inefficient; unattainable C. unattainable; inefficient *** D. efficient; inefficient 32. If substitution bias is occurring from year to year, A. the CPI will overstate the actual inflation rate. *** B. the CPI will understate the actual inflation rate. C. the CPI will be an accurate measure of the actual in...
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