Lets consider some data on nominal GDP and GDP price deflator from the Federal

Lets consider some data on nominal gdp and gdp price

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17.Let’s consider some data on nominal GDP and GDP price deflator from the Federal Reserve Database:Nominal GDP(billions ofdollars)GDP pricedeflatorApril4,2013$16667.9106.294132.9014.432.90
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Using the data in the table above, real GDP is equal to $__________.A) 1771697.76B) 15680.94C) 156.81D) 15.68Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):B18.During the 1973-1975 recession, GDP growth was about -3% and the percent change in prices was about 13%. This combination of GDP growth and percent change in prices is referred to as:Table for Individual Question FeedbackPoints Earned:0.0/3.0Correct Answer(s):C19.Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to understate the true extent of joblessness?Table for Individual Question FeedbackPoints Earned:0.0/3.0Correct Answer(s):B
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20.Use the table below to answer questions 20-23The table below shows the ‘hypothetical’ basket(s) of consumption goods for a 'typical' Penn State college student for 2012 and 2013.2012 Basket for ‘typicalPSU college student’2013 Basket for ‘typicalPSU college student’ItemPriceQuantityItemPrice QuantityTextbooks$806Textbooks$906Rent$700 1Rent$800 1PSU sporting events$156PSU sporting events$203Dinners in StateCollege$256Dinners in StateCollege$258Assume 2012 is the base year. The rate of inflation between 2012 and 2013 is ____%. NOTE: calculate the rate of inflation using price indexes.6*80+1*700+6*15+6*25=14206*90+1*800+6*20+6*25=1610PI2012=100PI2013=(1610/1420)*100 = 113.38Inflation=[(113.38-100)/100]*100 = 13.38%Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):D
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21.Now update the base year to 2013. The rate of inflation between 2012 and 2013 is now _____%. NOTE: calculate the rate of inflation using price indexes.A) 12.28B) 89.06C) 113.38D) 13.38E) 12.83Feedback:6*90+1*800+3*20+8*25=16006*80+1*700+3*15+8*25=1425PI2012=(1425/1600)*100 = 89.0625PI2013 = 100Inflation: [(100-89.0625)/89.0625]*100 = 12.28%Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):A22.Which rate of inflation accounts for the substitution bias?Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):B
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