4.Now let’s use the expenditure approach to calculate nominal GDP. So here we will add up all consumer spending on FINAL goods in this economy. Remember that the final goods in this economy are fresh apricots and also dried apricots. We have to be careful not to double count here though because some of the fresh apricots produced by Fannie are used by Darryl to make dried apricots.So first we find out how much money consumers spent on each of the final goods:How much money was spent by consumers on Fannie’s fresh apricots?A) $800,000B) $2,000,000C) $1,200,000D) $2,300,000E) none of the above are correct.Feedback: Some of Fannie’s apricots are sold to Darryl at a cost of $1,200,000 and the remainder are sold as final goods to consumers. Fannie’s revenues are $2,000,000 and Darryl buys $1,200,000 worth of apricots from Fannie, so $800,000 worth of apricots are sold as FINAL goods to consumers.Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):A5.How much money was spent by consumers on Darryl’s dried apricots?Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):D

6.Now we are ready to calculate nominal GDP using the expenditure approach. Add up your answers for #4 and #5. What is nominal GDP calculated using the expenditure approach equal to?Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):C7.According to the cruise ship example what are the real objectives (goals) of macroeconomic policymakers?Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):E8.According to the cruise ship example what are the nominal objectives (goals) of macroeconomic policymakers?A) full employmentB) 0% inflationC) economic growth equal to the potential growth rate of the economyD) price stabilityE) both A and C are correctTable for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):D9.Use the table below to answer questions 9-16Good20112012QuantityPriceQuantityPrice

Tomatoes500$2.00600$2.20Tofu800$4.001000$4.25Tacos900$3.00900$4.00Nominal GDP for 2011 is $.Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):690010.Nominal GDP for 2012 $.Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):917011.Assuming that 2011 is the base year, real GDP for 2011 is $.Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):690012.Assuming that 2011 is the base year, real GDP for 2012 is $.Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):790013.Again assuming that 2011 is the base year, the GDP deflator for 2011 is .Table for Individual Question FeedbackPoints Earned:3.0/3.0Correct Answer(s):100

14.Again assuming that 2011 is the base year, the GDP deflator for 2012 is .

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- Fall '10
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- Macroeconomics, Inflation, Darryl, Correct Answer, Individual Question, FANNIE