If nominal GDP of a country increased and real GDP remained unchanged in a part

If nominal GDP of a country increased and real GDP remained unchanged in a particular year which of the following is most likely to
have taken place?
A)Output increased and the price level
increased.
B)Output increased and the price level
decreased.
C)Output remained contant and the price level
increased.
D)Output decreased and the price level
decreased.
E)Output increased and the price level remained
constant. If both real GDP and nominal GDP of a country increased at the same rate in a particular year which of the following is most
likely to have taken place?
A)Output increased and the price level
increased.
B)Output increased and the price level
decreased.
C)Output decreased and the price level
increased.
D)Output decreased and the price level
decreased.
E)Output increased and the price level remained
constant.
Consider a small country producing only two commodities (coffee beans and corn). In 2008 the country produced 500 pounds of
coffee at $12 per pound and 600 bushels of corn at $6 per bushel.

Assuming the price level in the economy remains same while the output of both these products increase by 10 percent in 2009
calculate the value of real GDP in this country for the year 2009?
A)$1056
B)$6900
C)$9600
D)$10560
E)$10 960 Consider a small country producing only two commodities (coffee beans and corn). In 2008 the country produced 500 pounds of coffee
at $12 per pound and 600 bushels of corn at $6 per bushel. Assuming that the output of these two commodities remains constant
while the price of each rises by 10 percent in 2009 compute the value of real GDP in 2009.
A)$6560
B)$8400
C)$9600
D)$10560
E)$12000 Which of the following industrial countries experienced a relatively slower growth of real GDP in the latter half of the 1990s?
A)Canada
B)United States
C)Italy
D)France
E)Japan
The table given below lists the price per unit and output of computers and calculators (the only two goods produced by a
nation) for the years 1995 and 2003.

Calculate the nominal GDP for 1995.
A)$110000
B)$223000
C)$254000
D)$448000
E)$520000
The table given below lists the price per unit and output of computers and calculators (the only two goods produced by a
nation) for the years 1995 and 2003.

Calculate the nominal GDP for 2003.
A)$223000
B)$254000
C)$376000
D)$448000
E)$520000
The table given below lists the price per unit and output of computers and calculators (the only two goods produced by a
nation) for the years 1995 and 2003.

What is the constant-dollar real GDP growth from 1995 to 2003 using 2003 as the base
year?
A)-75 percent
B)zero percent
C)14 percent
D)50 percent
E)100 percent Suppose the price index is 100 in the base year and the price of a pound of oranges in that year is $1.96. Now if the price index
changes to 105 in the following year how much would a pound of oranges cost?
A)$0.25
B)$1.50
C)$1.96
D)$2.06
E)$2.45 Suppose the current price of DVDs is $16 while its base-year price is $11.50. The value of the price index for the current year is
approximately:
A)25
B)39
C)139
D)160
E)172
The table given below reports the price of soda over four consecutive years.

Compute the price index for the base year.
A)30
B)80
C)100
D)120
E)130
The table given below reports the price of soda over four consecutive years.

Compute the price index for the third year.
A)100
B)118
C)130
D)150
E)183 National income accounting fills in the dollar values in the circular flow.
A)True
B)False GDP is based on the market value of goods and services produced in an economy and not on the value of only final goods and
services.
A)True
B)False The services of a husband or wife as a homemaker and cash gains from a lottery are included in the calculation of gross domestic
product.
A)True
B)False The sale of live cattle to a slaughterhouse constitutes a final transaction that is counted as part of the gross domestic product.
A)True
B)False The value added approach involves adding up the value of the final product and the value of intermediate goods used in the
production process.
A)True
B)False According to the expenditures approach gross domestic product represents the sum of consumption spending government spending net
exports and net investment.
A)True
B)False Other things remaining unchanged a decline in imports is associated with an increase in gross domestic product.
A)True
B)False Depreciation must be subtracted from the calculation of gross domestic product.
A)True
B)False Gross national product in terms of the income method is equal to national income plus indirect business taxes minus the capital
consumption allowance.
A)True
B)False The output produced by domestically owned firms in foreign countries is included in the U.S. GDP but not in the U.S. GNP.
A)True
B)False When indirect business taxes are subtracted from GDP we get net national product of a nation.
A)True
B)False FICA taxes and corporate retained earnings are subtracted from national income when personal income is computed.
A)True
B)False To arrive at a more accurate measure of real output changes in an economy nominal GDP figures should be adjusted for inflation.
A)True
B)False A price index is a measure of the average level of prices in an economy.
A)True
B)False The consumer price index [CPI] is considered the best measure of the cost of living of individuals in a country.
A)True
B)False The consumer price index [CPI] measures price changes at an earlier stage of production than the producer price index [PPI] hence
increases in the CPI are usually followed by increases in the PPI.
A)True
B)False Since there are smaller fluctuations in the equilibrium prices of final goods than in the prices of intermediate goods the
producer price index is more volatile than the consumer price index.
A)True
B)False