Question 1

Which of the following accurately indicates how the recent outbreaks of terrorism have influenced the GDP of western nations?

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Question 2

Assume that between 1999 and 2009 nominal GDP increased from $7 trillion to $12 trillion and that the GDP deflator rose from 100 to 150.Which of the following expresses GDP for 2009 in terms of 1999 prices?

Accepted Answer

To express GDP in terms of 1999 prices, we need to use the 1999 GDP deflator (100) and apply it to the 2009 nominal GDP. This gives us:

Real GDP = Nominal GDP / GDP deflator

Real GDP in 2009 = $12 trillion / 1.5 = $8.0 trillion

Therefore, the best choice is B) $8.0 trillion.

Question 3

Your father tells you he earned $3.00 per hour when he was 16 in 1977;you remember making $6.00 per hour when you were 16 in 1999.Given that the CPI was 36.7 in 1969 and 166.1 in 2007,which of the following is the 2007 real equivalent of your father's hourly earnings when he was 16?

Accepted Answer

To find the 2007 real equivalent of your father's earnings, adjust for inflation using the CPI. The formula is: (Old Wage * New CPI) / Old CPI. So, ($3.00 * 166.1) / 36.7 = $13.58.

Question 4

Which of the following would be counted in the calculation of GDP?

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Question 5

What is the difference between real and nominal GDP? If the president of the United States (or your instructor)asked you to evaluate the economy over the past five years,which one would you use and why?

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Question 6

Use the table below to choose the correct answer.

Gross domestic product equals

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Question 7

Accurate measurement of GDP is important to business decision-makers because this information will help them better determine the

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Accurate measurement of GDP provides information on the course of the economy and the level of demand for products, which helps business decision-makers in determining their production levels, investments, and pricing strategies. GDP also reflects the overall health of the economy, which affects consumer spending and business operations. While GDP may indirectly affect the general happiness of citizens and their quality of life, it is not its primary purpose. Similarly, while GDP can provide some information on the economic well-being of certain groups, it is not its primary purpose. Leisure time and quality of life are not directly measured through GDP.

Question 8

Economists generally use GDP to measure a nation's total output because it is

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GDP is a measure of the value of all final goods and services produced in a country during a specific time period. This makes it a reliable measure of a nation's total output. Option A is incorrect because GDP is not equal to the sales value of all transactions, but rather the final value of goods and services produced. Option B is incorrect because GDP measures the value of goods and services produced, not the cost of producing them. Option C is incorrect because GDP is affected by changes in the prices of products over time.

Question 9

How much would be added to this year's GDP if you sold your four-year-old automobile for $4,000 and purchased a two-year-old model from an acquaintance for $10,000.

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Question 10

Answer the following questions:
a.What does GDP measure,and why is it a useful tool for economists,business decision makers,and government policy makers?
b.Explain at least two important things GDP does not measure.

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a.What does GDP measure,and...

Question 11

If the Consumer Price Index in 2008 was 150 and the CPI in 2009 was 165,the rate of inflation between 2008 and 2009 would be

Accepted Answer

To calculate the rate of inflation, we use the formula:

Rate of Inflation = ((CPI in the current year - CPI in the previous year) / CPI in the previous year) x 100

Using this formula, we get:

Rate of Inflation = ((165-150) / 150) x 100
= (15/150) x 100
= 0.1 x 100
= 10%

Therefore, the rate of inflation between 2008 and 2009 is 10%. So, the correct answer is B) 10 percent.

Question 12

If on-the-job working conditions have improved over time,

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Question 13

Per capita GDP is

Accepted Answer

Per capita GDP measures the real GDP of a country divided by its population, giving an indication of the average income per person in that country. It is not a measure of resources available to each person or an indicator of the overall production of a government.

Question 14

The consumer price index is calculated using a fixed basket of goods.Will this always give an accurate representation of the changing cost of living to consumers? Why or why not?

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Question 15

If the GDP deflator in 2009 was 120 compared to a value of 100 during the 2004 base year,this would indicate that

Accepted Answer

The GDP deflator measures the change in prices of all goods and services produced in an economy, so a value of 120 in 2009 compared to a base year of 100 in 2004 indicates that the general level of prices in 2009 was 20 percent higher than in 2004.

Question 16

Which of the following would increase U.S.GDP?

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...

Question 17

The dollar value of GDP increased approximately 4 percent during the year,but real GDP fell 2 percent.Which of the following best explains this data?

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Question 18

As per capita GDP has risen in the United States and other countries,

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As per capita GDP has risen in the United States and other countries, there has been a positive correlation with life expectancy and leisure time, which have increased, while infant mortality and illiteracy have decreased. This suggests an overall improvement in quality of life.

Question 19

Explain the two approaches to calculating GDP.

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Question 20

National income is

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National income is defined as the total income earned by individuals and businesses in a country within a given time period. It includes employee compensation, self-employment income, interest, rents, and corporate profits. Option A only considers personal income of individuals, while Option B doesn't account for all income earned in a country as it only subtracts depreciation from gross national product. Option D describes the components of GDP, which is related to but not the same as national income.

Quiz 7: Ataking the Nations Economic Pulse