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Exam 21: Gdp and the Consumer Price Index

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Question 71

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If real GDP rises while nominal GDP falls, then prices on average have:

A) risen.
B) fallen.
C) stayed the same.
D) decreased and then been offset by an equal increase.

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Question 72

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In the circular-flow diagram, firms:

A) supply goods and services.
B) demand goods.
C) supply resources.
D) demand services.

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Question 73

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The calculation of GDP includes the value of all of the following goods EXCEPT:

According to the circular-flow diagram, which of the following economic agents engage in consumer spending?

Use the following to answer questions Scenario: Real GDP Suppose that in year 1 an economy produces 100 golf balls that sell for $3 each and 75 pizzas that sell for $8 each. The next year the economy produces 110 golf balls that sell for $3.25 each and 80 pizzas that sell for $9 each. -(Scenario: Real GDP) Look at the scenario Real GDP. The value of nominal GDP in years 1 and 2 respectively is:

Which of the following would NOT be included in this year's GDP?

Use the following to answer questions -(Table: Peanut Butter and Jelly Economy) Look at the table Peanut Butter and Jelly Economy. How much of the increase in nominal GDP between 2010 and 2011 was due to inflation?

Investment spending is spending on:

Investment spending is spending on:

The best available common measure of a nation's standard of living is:

GDP excludes all of the following EXCEPT:

A bond is:

The value of all of the following goods EXCEPT _____ is included in the calculation of aggregate output.

Use the following to answer questions Figure: Expanded Circular-Flow Model -(Figure: Expanded Circular-Flow Model) Look at the figure Expanded Circular-Flow Model. The total flow of funds into and out of the rest of the world is:

Value added in national income accounts refers to the:

The inflation-adjusted measure of aggregate output typically used by economists is called:

Use the following to answer questions Figure: Circular-Flow Model -(Figure: Circular-Flow Model) Look at the figure Circular-Flow Model. If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it) and there is a decrease in exports, which of the following is likely to happen?

Suppose that Mr. Green Jeans sells $5,000 of wheat to Big Ben Bakery. Big Ben uses the wheat to make flour and then hamburger buns, which it sells to Hamburger Heaven for $11,000. Hamburger Heaven also buys $20,000 of beef from a rancher. Hamburger Heaven uses the beef and buns to make 10,000 hamburgers, which are sold for $5 each. How much do these transactions add to GDP?

Real GDP tends to understate our economic well-being because it:

The most important use of GDP is as a measure of: