ECON
econ exam 2

# In an economy planned business investment equals 720

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17. In an economy planned business investment equals \$720 million. The fixed gross investment equals \$560 million and the residential investment equals \$120 million. The value of inventory investment equals VB # 23 and VC # 12 a. \$140 million. b. \$20 million. c. \$25 million. \$40 million . e. none of the above. In the given information I p = 720, fixe investment equals \$560 million and residential investment equals \$120 million. You have been asked to find the inventory investment. From the formula sheet Planned investment =Fixed+Residential + Inventory 720 =560 + 120 + Inventory 720 =680 + Inventory Inventory Investment =720 - 680 = 40 . 5

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18. Last year, Sam Brown spent each Saturday from May to November building a new wing on his family home. In last year’s GDP VB # 24 and VC # 1 19. Marianne and Laura are both homemakers with children. Then Laura takes a volunteer (unpaid) job at a hospital and hires Marianne to care for her preschool-age child. What happens to GDP? VB # 25 and VC # 2 GDP increases . b. GDP decreases. c. There is no change in GDP. d. GDP increases only if Marianne gives the child better care than Laura. e. GDP increases only if the patients receive better care now that Laura works in the hospital. Marianne is creating new commercial serivec, GDP will go up. Lauren is also helping create new service in the hospital, that will also increase GDP. 20. An economy has some positive cyclical unemployment rate. For this economy which of the following statement may not be correct? VB # 5 and VC # 13 21. If the price-deﬂators were 187 last year and is 193 this year, the annual rate of inﬂation in this year is VB # 6 and VC # 14 IN = ( P t - P t - 1 P t - 1 ) × 100 = ( 193 - 187 187 ) × 100 = 3 . 20% . 6

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• Spring '10
• BRIANALLENHUNT

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