Part 4 Econ

If total spending rises from one year to the next, then

Which statement represents most correctly the relationship between GDP and real GDP?

Until recently, George lived in a home that was newly constructed in 2005. In 2005, he paid $200,000 for the brand new house. He sold the house in 2006 for $225000. Which of the following statements is correct regarding the sale of the house?

The price index in the first year is 150; in the second year it is 160; and in the third year it is 175. The inflation rate is about

One bag of flour is sold for $1.50 to a bakery, which uses the flour to bake bread that is sold for $4.00 to consumers. A second bag of flour is sold to a consumer in a grocery store for $2.00. Taking three transactions into account, what is the effect on GDP?

A recession is a period during which

If the nominal interest rate is 6 percent and the rate of inflation is 9 percent, the the real interest rate is

The inflation rate is defined as the

The price index in 2006 is 120, and in 2007 it is 127.2. What is the inflation rate?

If the real interest rate relevant to a bank account is 5 percent and the expected inflation rate is 4 percent, then after a year a person expects to have, relative to today

For the purpose of calculating GDP, investment is spending on?

Ralph pays someone to mow his lawn, while Mike mows his own lawn. Regarding these two practices, which of the following statement is correct?

The nominal interest rate tells you

Refer to Table 24-1, Suppose the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans. Using 2005 as the base year, what was the inflation rate in 2006?

Refer to Table 24-1, Suppose the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans. Using 2005 as the base year, the CPI for 2006 is

If nominal GDP is $10 trillion and real GDP is $8 trillion, the GDP deflator is

A movie company makes 500,000 DVDs of one of its latest releases. It sells 300,000 of them before the end of the second quarter, and holds the others in its warehouse. How will the 200,000 unsold DVDs be treated in the GDP statistics?

Which of the following represents a transfer payment?

The consumer price index is used to

GDP is defined as

Suppose that the country of Samiam produces only eggs and ham. In 2005 it produced 100 dozen eggs at $3 per dozen and 50 lbs of ham at $4 per lb. In 2004, the base year, eggs sold for $1.50 per lb. For 2005,

In an imaginary economy, consumers buy only hot dogs and hamburgers. The fixed basket consists of 10 hot dogs and 6 hamburgers. A hot dog costs $3 in 2006 and $5.40 in 2007. A hamburger cost $5 in 2006 and $6 in 2007. Which of the following statements is correct?

Which of the following transactions adds to U.S. GDP for 2006?

Assume an economy experienced a positive rate of inflation between 2003 and 2004 and again between 2004 and 2005. However, the inflation rate was lower between 2004 and 2005 than it was between 2003 and 2004. Which of the following scenarios is consistent with this assumption?

A country reported nominal GDP of $200 billion in 2006 and $180 billion; it reported a GDP deflator of 125 in 2006 and 105 in 2005. Between 2005 and 2006,

Gross domestic product serves as a measure of two things:

Refer to Table 24-4. Using 2006 as the base year, the consumer price index is

Refer to Table 24-4. Using 2007 as the base year, the consumer price index is

Which of the following is the most accurate statement about real and nominal interest rates?

After the terrorist attacks on September 11, 2001, governments within the United States raised expenditures to increase security at airports. The purchases of goods and services are

In computing GDP, market prices are used to value final goods and services because

In a simple circular-flow diagram total income and total expenditure are

In a particular economy, the price index was 270 in 2005 and it was 300 in 2006. Which of the following statements is correct?

The component of GDP called consumption consists of

A COLA automatically raises the wage rate when