Exam 7: Ataking the Nations Economic Pulse

Assume that between 1998 and 2008,nominal GDP increased from $7 trillion to $12 trillion and that the price index rose from 100 to 133.3.Which of the following expresses GDP for 2008 in terms of 1998 prices?

The consumer price index is designed to measure the extent to which

Determine whether each of the following transactions will be counted in the 2005 GDP of the United States.If the transaction is counted,identify which expenditure component (personal consumption,gross investment,government consumption and gross investment,or net exports)will be affected. a.Norm,a frequent visitor to a local bar,purchases a Budweiser beer.(Budweiser beer is domestically produced. ) b.The owner of the local bar purchases a new domestically made cooler unit in which to store his beer. c.Carla,a U.S.foreign exchange student,works her way through college in Germany as a waitress in a bar. d.On her night off,Carla purchases a Budweiser beer for her friend in the German bar.

Your father tells you he earned $1.50 per hour when he was 16 in 1969.Given that the CPI was 36.0 in 1969 and 215 in 2008,how much would you have to earn in 2008 in order to have the same real wage as your father in 1969?

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?

In 1980,the price of a gallon of gasoline was $1.25.The Consumer Price Index was 82.4 in 1980 compared to 215.3 in 2008 (1983 - 1984 = 100).Measured in 2008 dollars,the price of gasoline in 1980 was

If tax rates were raised substantially,we would expect which of the following scenarios to result?

If a used-car dealer purchases a used car for $1,000,restores it,and resells it for $1,500,the dealer contributes

In a country where many families make their own clothes,GDP will be understated because the clothes making represents

When adjusting nominal GDP for price changes,it is preferable to use the GDP deflator rather than the consumer price index because

Which of the following is a shortcoming of GDP?

Which of the following about inventory changes and GDP is true?

Which of the following would increase GDP?

Use the table below to answer the following question(s). Table 7-5 -Refer to Table 7-5.National income equals

Which of the following would increase GDP?

In 2008 in the U.S. ,the four components of GDP matched up with their relative importance as follows:

The GDP deflator is designed to

Over time,people have come to rely more on market-produced goods and less on goods that they produce for themselves.For example,busy people with high incomes,rather than cleaning their own houses,hire people to clean their houses.By itself,this change has

Use the table below to choose the correct answer. Table 7-8 -Refer to Table 7-8.Gross domestic product equals

Simon Kuznets,winner of the 1971 Nobel Prize in economics,is famous for his contributions in