Exam 7: Taking the Nations Economic Pulse

Nominal gross domestic product for the United States was $7,661.6 billion in 1996 and $8,110.9 billion in 1997. The GDP deflator was 109.5 in 1996 and 111.6 in 1997. a.What was the 1997 real GDP expressed in 1996 prices? b.What were the 1996 and 1997 GDPs expressed in base-year prices? c.What was the percent change in the nominal GDP between 1996 and 1997? d.What was the percent change in real GDP between 1996 and 1997? e.What was inflation between 1996 and 1997?

A professor of economics gets a $100 a month raise. She figures that even with her new monthly salary she will be unable to buy as many goods and services as she could 12 months ago.

The 2012 box office receipts for the movie The Avengers were $1,515.8 million. By way of comparison, the 1977 receipts for Star Wars were $798.0 million. If the Consumer Price Index was 60.6 in 1977 and 229.6 in 2012, which of the following is true?

Suppose, in dollar terms, nominal GDP increased approximately 4 percent during a given year, and real GDP decreased 1 percent. Which of the following best explains these events?

If ten years ago the price of a movie ticket was $5 and the average hourly wage was $10, and today the price of a movie ticket is $8 and the average hourly wage is $20, then

A business produced $10 million of goods in 2010 but sold only $9 million. Is the $1 million increase in inventory counted as part of the 2010 gross domestic product?

A firm purchases $400,000 worth of raw materials and pays wages and salaries of $300,000 and dividends of $100,000. If the firm sells its output for $1 million, the firm's value added to GDP is

Which of the following would increase GDP?

The consumer price index is

Which of the following events will leave GDP unchanged?

Which one of the following would count as investment in the national income accounts?

Which of the following events will reduce GDP?

If you wanted to compare the quantity of output of a country across time periods, which of the following would you use?

An increase in the Consumer Price Index indicates that

The GDP deflator is designed to adjust nominal GDP

Answer the following questions: a.What is the difference between gross domestic product and gross national product? b.Give an example of a transaction that would be counted in GDP but not in GNP. c.Give an example of a transaction that would be counted in GNP but not GDP.

The change in nominal GDP will always exceed the change in real GDP when nominal GDP is

Consider the following information for the U.S. economy (figures in billions). Table 7-6 Refer to Table 7-6. What was the value of national income?

Over the last few decades, Americans have chosen to cook less at home and eat more at restaurants. This change in behavior, by itself, has

Because GDP does not fully account for improvements in the quality of goods,