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Economics
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13 Dec 2019

Which of the following would NOT be counted in 2010's GDP?

a. the value of a 2008 boat you purchase from a boat dealer in 2010
b. the commissions earned by a real estate agent in selling condominiums built prior to 2010
c. the value of a refrigerator manufactured in 2010 but not sold in 2010
d. the 2010 salary of a used motorcycle salesperson

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Keith Leannon
Keith LeannonLv2
17 Dec 2019
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Related textbook solutions

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Related questions

Which of the following is included in U.S. GDP?

i) the rental value of homes owned by U.S. citizens.

ii) the production of Suburban SUVs by GM in its plant in Mexico.

iii) Tickets sold by U2 for concerts held in the United States.

A) ii only.

B) ii and iii.

C) i, ii and iii.

D) i and iii.

E) i only.

Which of the following is NOT directly included in Canadian GDP?

A) The purchase of tickets to a Kanye West concert in Montreal.

B) The sale of tickets to the Vancouver Oympics to U.S. citizens.

C) Gasoline purchased by a tour bus operator in Quebec.

D) Bus tickets sold to tourists for a tour bus ride in Montreal.

E) All of the items would be included in Canadian GDP.

Which of the following is classified as a final good or service?

i. tires bought by GM to put on new Tahoes

ii. mustard bought by Subway to put on its sub sandwiches

iii. your purchase of online access to the Wall Street Journal

A) i and ii.

B) i, ii and iii.

C) iii only.

D) ii and iii.

E) ii only.

Which of the following correctly describes a final good?

i) A final good is bought by its final consumer.

ii) A final good can be used by a firm as a component of another good or service.

iii) Investment goods cannot be a final good.

A) i only.

B) i and ii.

C) i, ii and iii.

D) i and iii.

E) ii and iii.

A restaurant buys fish to offer as a daily menu special. The purchase of the fish by the restaurant is

A) a consumption expenditure.

B) an investment.

C) an intermediate good.

D) an example of government expenditures on goods and services.

E) part of net exports if the fish was caught beyond the U.S. border.

Which of the following is classified as an intermediate good?

i) the purchase of a Big Mac by a college student

ii) McDonald's purchase of pickles

iii) a McDonald's restaurant owner's interest payment for the loan on her building.

A) ii only.

B) ii and iii.

C) i only.

D) i and iii..

E) i, ii and iii.

Which of the following would NOT be directly included in the U.S. GDP in 2010?

A) the market value of restaurant meals sold in 2010

B) the market value of the jet fuel bought by Delta to use for its flights in 2010

C) the value of the automobiles produced in 2010 at the Toyota plant located in Georgetown, KY

D) legal services provided to first time home buyers during 2010

E) the purchase of a new home in Atlanta, Georgia in 2010

The table below lists annual consumer price index and inflation rates for a country over the period 2005-2010. Assume the year 2005 is used as the base year.

Year

Consumer Price Index

Inflation Rate

2005

100

2006

115

B

2007

125

C

2008

140

D

2009

A

10%

2010

160

E

8.7%

120

25%

12%

The price index was 170 in the first year, 180 in the second year, and 195 in the third year. The inflation rate was about

5.9 percent between the first and second years, and 8.3 percent between the second and third years.

5.6 percent between the first and second years, and 7.7 percent between the second and third years.

10 percent between the first and second years, and 15 percent between the second and third years.

80 percent between the first and second years, and 95 percent between the second and third years.

0.1 points

QUESTION 17

The price index was 150 in the first year, 142.5 in the second year, and 138.2 in the third year. The economy experienced

5.0 percent deflation between the first and second years, and 3.0 percent deflation between the second and third years.

7.5 percent deflation between the first and second years, and 4.3 percent deflation between the second and third years.

5.3 percent inflation between the first and second years, and 4.1 percent inflation between the second and third years.

7.5 percent inflation between the first and second years, and 4.3 percent inflation between the second and third years

0.1 points

QUESTION 18

Which of the following statements is correct about the relationship between the nominal interest rate and the real interest rate?

The real interest rate is the nominal interest rate minus the rate of inflation.

The real interest rate is the nominal interest rate times the rate of inflation.

The real interest rate is the nominal interest rate plus the rate of inflation.

The real interest rate is the nominal interest rate divided by the rate of inflation.

0.1 points

QUESTION 19

If the nominal interest rate is 6 percent and the rate of inflation is 2 percent, then the real interest rate is

4 percent.

-4 percent.

3 percent.

8 percent.

0.1 points

QUESTION 20

If the nominal interest rate is 7 percent and the real interest rate is -2.5 percent, then the inflation rate is

9.5 percent.

4.5 percent.

-4.5 percent.

-9.5 percent.

. From 2009 to 2010, the CPI for education increased from 279.3 to 281.8. What was the inflation rate for education between 2009 and 2010?

0.9%

9.0%

2.5%

90%

If the consumer price index changes from 125 in September to 150 in October, what is the rate of inflation?

20.0%

45.5%

16.7%

9.1%

. Suppose a basket of goods and services has been selected to calculate the CPI and 2014 has been selected as the base year. In 2013, the basketĆ¢Ā€Ā™s cost was $80; in 2014, the basketĆ¢Ā€Ā™s cost was $86; and in 2015, the basketĆ¢Ā€Ā™s cost was $90. The value of the CPI in 2015 was

104.6 and the inflation rate was 4.6%.

112.5 and the inflation rate was 4.6%.

112.5 and the inflation rate was 12.5%.

104.6 and the inflation rate was 12.5%.

Suppose a basket of goods and services has been selected to calculate the CPI. In 2002, the basketĆ¢Ā€Ā™s cost was $80; in 2008, the basketĆ¢Ā€Ā™s cost was $92; and in 2010, the basketĆ¢Ā€Ā™s cost was $108. The base year must be

The base year cannot be determined from the given information.

2002

2008

one of the years between 2008 and 2010.

Suppose a basket of goods and services has been selected to calculate the CPI and 2012 has been chosen as the base year. In 2012, the basketĆ¢Ā€Ā™s cost was $80.00; in 2013, the basketĆ¢Ā€Ā™s cost was $84; and in 2014, the basketĆ¢Ā€Ā™s cost was $87.60. The value of the CPI was

All of the above are correct.

109.5 in 2014.

105 in 2013.

100 in 2012.

Which of the following is correct?

The CPI is better than the GDP deflator at reflecting the goods and services bought by consumers.

The GDP deflator is better than the CPI at reflecting the goods and services bought by consumers.

The GDP deflator and the CPI are equally good at reflecting the goods and services bought by consumers.

The GDP deflator is more commonly used as a gauge of inflation than the CPI is.

The inflation rate is defined as the

percentage change in the price level from the previous period.

price level in an economy.

change in the price level from one period to the next.

price level minus the price level from the previous period.

Economists use the term inflation to describe a situation in which

the economy's overall price level is rising.

some prices are rising faster than others.

the economy's overall price level is high, but not necessarily rising.

the economy's overall output of goods and services is rising faster than the economy's overall price level.

1. Which of the following is likely to happen if the Fed buys Treasury securities from banks?

Ā  interest rate rises; investment falls
Ā  interest rate rises; investment rises
Ā  interest rate falls; investment rises
Ā  interest rate falls; investment falls

2. The main goal of monetary policy is to shift

Ā  AD.
Ā  SRAS.
Ā  LRAS.
Ā  both AD and SRAS.
Ā  both AD and LRAS.

3. Which of the following is true regarding the effects of an expansionary monetary policy?

Ā  Printing more money will affect real GDP only in the short run because all prices do not adjust fully in the short run.
Ā  Printing more money will affect real GDP both in the short and long run because inflation is a natural occurrence of expansionary monetary policy.
Ā  Printing more money will not lower the value of money in the short run because prices are fully flexible in the short run.
Ā  Printing more money will ultimately raise the value of money in the long run because prices are fully flexible in the long run.

4. In which of the following cases are you likely to be adversely affected by unexpected inflation?

Ā  You, the owner of a local restaurant, charge the price of lamb lasagna as per the daily market rate of lamb.
Ā  You purchase Mountain Dew every day from the dormitory vending machine, which keeps its prices fixed for the entire school year.
Ā  You, the owner of an airline company, sign a two-year contract for airline fuel.
Ā  You deposit $10,000 in a bank account for 5 years for a fixed interest rate of 1%.

5. The Phillips curve depicts the relation between

Ā  real GDP and price level.
Ā  price level and inflation rate.
Ā  unemployment rate and inflation rate.
Ā  unemployment rate and real GDP.

6. Which of the following statements is true regarding the shapes of short-run and long-run Phillips curves?

Ā  The short-run Phillips curve is vertical and the long-run Phillips curve is downward sloping.
Ā  The short-run Phillips curve is downward sloping and the long-run Phillips curve is vertical.
Ā  Both the short-run and long-run Phillips curves are downward sloping.
Ā  Both the short-run and long-run Phillips curves are vertical.

7. Suppose the table below lists the actual annual inflation rates for 2010 to 2015. What would be the most likely predictions people make about the inflation rate for 2016 based on adaptive and rational expectations theories, respectively?

Year Actual Inflation rate
2010 0%
2011 0%
2012 3%
2013 3%
2014 6%
2015 6%
Ā  Ā 
Ā  6% and 3%
Ā  6% and 9%
Ā  6% and 12%
Ā  9% and 6%
Ā  3% and 6%

8. Which of the following can change relatively quickly in the short-run?

Ā  the price of a latte in a coffee shop
Ā  the salary of a finance professor
Ā  the rent paid for a store

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