Question 1

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was ________ and to real GDP in 2015 was ________.

Accepted Answer

Peg's contribution to nominal GDP in 2015 was: (4,000 nails × $20)= $80,000. Since 2015 was the base year, the nominal and real GDP contributions are the same.

Question 2

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was ________ and in 2016 was ________.

Accepted Answer

Peg's contribution to nominal GDP in 2015 was (4,000 nails × $20)= $80,000, and her contribution in 2016 was (4,500 nails × $22)= $99,000.

Question 3

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2017?

Accepted Answer

Bob's contribution to real GDP was: (3,100 × $7)= $21,700.

Question 4

In the base year, real GDP ________ nominal GDP.

Accepted Answer

In the base year, current prices are the prices of the base year.

Question 5

A measure of GDP in which quantities produced are valued at current-year prices is called:

Accepted Answer

Nominal GDP measures the current dollar value.

Question 6

Real GDP is measured in ________ prices; nominal GDP is measured in ________ prices.

Accepted Answer

Real GDP takes inflation out of nominal values; so real GDP is computed at the fixed prices of the base year.

Question 7

If prices in the current year are higher on average than in the base year, real GDP in the current year ________ nominal GDP in the current year.

Accepted Answer

When the price level has risen, the current prices used when computing today's nominal GDP are higher than the prices in the base year, which used for computing real GDP.

Question 8

Nominal GDP measures the ________ of production.

Accepted Answer

Nominal GDP measures the current dollar value.

Question 9

Assume an economy produces only footballs and baseballs and the base year is 2016.   
Given the data in the table above, what is the value of real GDP in 2017?

Accepted Answer

Real GDP in 2017 is: the quantities in 2017 × prices in the base = (300 footballs × $20)+ (600 baseballs × $10)= $6,000 + 6,000 = $12,000.

Question 10

Assume an economy produces only footballs and baseballs and the base year is 2016.   
 Given the data in the table above, what is the value of nominal GDP in 2017?

Accepted Answer

Nominal GDP in 2017 is: (300 footballs × $25)+ (600 baseballs × $15)= $7,500 + $9,000 = $16,500.

Question 11

To compare the change in physical production (GDP)between 2012 and 2018, we should compare ________ GDP in 2012 with ________ GDP in 2018.

Accepted Answer

To measure physical production we have to take out changes that are only due to inflation. This means comparing historical real values with current real values.

Question 12

Assume an economy produces only hamburgers and hot dogs and the base year is 2016.  
 Given the data in the table above, what is the value of real GDP in 2017?

Accepted Answer

Real GDP in 2017 is: the quantities in 2017 × prices in the base = (3,000 hamburgers × $2)+ (4,000 hot dogs × $1)= $6,000 + 4,000 = $10,000.

Question 13

Comparisons of economic activity over time should be made using:

Accepted Answer

To measure physical production we have to take out changes that are only due to inflation. This means comparing historical real values with current real values.

Question 14

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2014 is the base year, what was Bob's contribution to nominal GDP in the year 2016?

Accepted Answer

Bob's contribution to nominal GDP was: (3,000 × $7)= $21,000.

Question 15

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2016?

Accepted Answer

Bob's contribution to real GDP was: (3,000 × $7)= $21,000.

Question 16

Real GDP measures the ________ of production.

Accepted Answer

Real GDP measures the market value of production using the prices of in a base year rather than current prices.

Question 17

Real GDP measures the ________ of production; nominal GDP measures the ________ of production.

Accepted Answer

Real GDP measures the physical volume and nominal GDP measures the current dollar value.

Question 18

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2015 was ________ and in 2016 was ________.

Accepted Answer

First note that in order to find Peg's contribution to real GDP, we must use the price of nails in the base years ($20)in both computations. So Peg's contribution to real GDP in the base year, 2015, was 4,000 nails × $20 or $80,000. Similarly, Peg's contribution to real GDP in 2016, was: (4,500 nails × $20)= $90,000.

Question 19

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to nominal GDP in 2017?

Accepted Answer

Bob's contribution to nominal GDP in 2017 was: (3,100 × $8)= $24,800.

Question 20

Assume an economy produces only hamburgers and hot dogs and the base year is 2016.  
 Given the data in the table above, what is the value of nominal GDP in 2017?

Accepted Answer

Nominal GDP in 2017 is: (3,000 hamburger × $3)+ (4,000 hot dogs × $1.50)= $9,000 + $6,000 = $15,000.

Quiz 17: Measuring Economic Activity: GDP and Unemployment

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was and to real GDP in 2015 was .

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was and in 2016 was .

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2017?

In the base year, real GDP ________ nominal GDP.

A measure of GDP in which quantities produced are valued at current-year prices is called:

Real GDP is measured in prices; nominal GDP is measured in prices.

If prices in the current year are higher on average than in the base year, real GDP in the current year ________ nominal GDP in the current year.

Nominal GDP measures the ________ of production.

Assume an economy produces only footballs and baseballs and the base year is 2016. Given the data in the table above, what is the value of real GDP in 2017?

Assume an economy produces only footballs and baseballs and the base year is 2016. Given the data in the table above, what is the value of nominal GDP in 2017?

To compare the change in physical production (GDP) between 2012 and 2018, we should compare GDP in 2012 with GDP in 2018.

Assume an economy produces only hamburgers and hot dogs and the base year is 2016. Given the data in the table above, what is the value of real GDP in 2017?

Comparisons of economic activity over time should be made using:

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2014 is the base year, what was Bob's contribution to nominal GDP in the year 2016?

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2016?

Real GDP measures the ________ of production.

Real GDP measures the of production; nominal GDP measures the of production.

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2015 was and in 2016 was .

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to nominal GDP in 2017?

Assume an economy produces only hamburgers and hot dogs and the base year is 2016. Given the data in the table above, what is the value of nominal GDP in 2017?

Quiz 17: Measuring Economic Activity: GDP and Unemployment

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was ________ and to real GDP in 2015 was ________.

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was ________ and in 2016 was ________.

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2017?

In the base year, real GDP ________ nominal GDP.

A measure of GDP in which quantities produced are valued at current-year prices is called:

Real GDP is measured in ________ prices; nominal GDP is measured in ________ prices.

If prices in the current year are higher on average than in the base year, real GDP in the current year ________ nominal GDP in the current year.

Nominal GDP measures the ________ of production.

Assume an economy produces only footballs and baseballs and the base year is 2016. Given the data in the table above, what is the value of real GDP in 2017?

Assume an economy produces only footballs and baseballs and the base year is 2016. Given the data in the table above, what is the value of nominal GDP in 2017?

To compare the change in physical production (GDP) between 2012 and 2018, we should compare ________ GDP in 2012 with ________ GDP in 2018.

Assume an economy produces only hamburgers and hot dogs and the base year is 2016. Given the data in the table above, what is the value of real GDP in 2017?

Comparisons of economic activity over time should be made using:

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2014 is the base year, what was Bob's contribution to nominal GDP in the year 2016?

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to real GDP in 2016?

Real GDP measures the ________ of production.

Real GDP measures the ________ of production; nominal GDP measures the ________ of production.

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2015 was ________ and in 2016 was ________.

Bob's Barber Shop cut 3,000 heads of hair in 2016 and 3,100 in 2017. The price of a haircut was $7 in 2016 and $8 in 2017. If 2016 is the base year, what was Bob's contribution to nominal GDP in 2017?

Assume an economy produces only hamburgers and hot dogs and the base year is 2016. Given the data in the table above, what is the value of nominal GDP in 2017?

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was and to real GDP in 2015 was .

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to nominal GDP in 2015 was and in 2016 was .

Real GDP is measured in prices; nominal GDP is measured in prices.

To compare the change in physical production (GDP) between 2012 and 2018, we should compare GDP in 2012 with GDP in 2018.

Real GDP measures the of production; nominal GDP measures the of production.

Peg's Manicure Manor did 4,000 sets of nails in 2015 and 4,500 sets of nails in 2016. The price of a set of nails was $20 in 2015 and $22 in 2016. If 2015 is the base year, Peg's contribution to real GDP in 2015 was and in 2016 was .