ECON252_Practice_Exam_1B_02-14-2013_-_BLUE_KEY_

# Wecouldexpectthecurrentdemandfor a hairgeltoincrease

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Unformatted text preview: l GDP in 2010 is _______ and real GDP in 2011 is _______ . A. \$1380; \$700 B. \$900; \$1380 C. \$900; \$800 *** D. \$900; \$700 E. \$1380; \$800 12. The GDP deflator in 2010 is _______ . A. 100.0 B. 154.2 C. 128.6 *** D. 161.3 E. [None of the above] 13. This country's inflation rate from 2010 to 2011 was A. 15.2% B. 43.9% C. 25.4%. D. 34.1%*** 14. For a closed economy with investment equal to 800 and private saving equal to 920, A. public saving equals 120. B. the government has a budget deficit of 120. *** C. GDP equals 1720. D. [None of the above] 15. Suppose the American Medical Association announces that men who shave their heads are less likely to die of heart failure. We could expect the current demand for A. hair gel to increase. B. shampoo to increase. C. razors to increase. *** D. combs to increase. [Use the following information to answer question 16.] The following table shows the average real interest rate and the average inflation rate from 2020 to 2023. Year Real Interest Rate(%) Inflation Rate(%) 2020 3.2 1.9 2021 2.1 4.7 2022 1.1 3.2 2023 2.2 4.1 16. According to the table, in which year is the nominal interest rate the highest? A. 2020 B. 2021*** C. 2022 D. 2023 17. Which of the following would be counted in US GDP? A. An automobile manufactured in Mexico that is produced by an American‐owned company. B. Illegal drugs produced in Canada and sold in the United States. C. A microchip manufactured in the United States and sold to an American‐owned computer company. D. An automobile manufactured in the United States that is produced by a German‐owned company. *** 18. Which of the following is considered part of consumption spending in the calculation of GDP for 2001? A. The construction of a new house in Dallas, Texas in 2001. B. The production of computer chips in December 2001 that will be used in making cell phones in 2002. C. The completion of a tax return on April 15, 2001 by a paid tax preparer. *** D. The purchase of a baseball that was signed by legendary player Babe Ruth in 1920. 19. Pencils and pens are substitutes. Suddenly, the price of graphite, important in producing pencils, increases. Simultaneously, the price of pens falls. How will this affect equilibrium in the market for pencils? A. The new equilibrium price of pencils is indeterminate, and the new equilibrium quantity of pencils is definitely higher. B. The new equilibrium price of pencils is definitely lower, and the new equilibrium quantity of pencils is definitely higher. C. The new equilibrium price of pencils is inde...
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