ECON 2301 Week 2 Quiz 4

ECON 2301 Week 2 Quiz 4 | Assignment Help | Central Texas College

Review Test Submission: Quiz 4

               

•             Question 1

               

                Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home.  Her purchase increases                                            

                               

Answers:             a.

Italy's GDP.

                b.

Neither U.S. nor Italy's GDP, since the product was bought in one country and used in another.

                c.

Italy's GDP and U.S. GDP, since Beth spent dollars buying the machine.

                d.

U.S. GDP since she will have the machine with her at home in the U.S.

                                               

•             Question 2

               

                If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?                                

                               

Answers:             a.

$38 billion.

                 b.

$15 billion.

                c.

$6.7 billion.

                d.

$21.6 billion.

 

 

•             Question 3

               

                For an economy as a whole, income must equal expenditure because                                   

                               

Answers:             a.

individuals can only spend what they earn each period.

                 b.

every dollar of spending by some buyer is a dollar of income for some seller.

                c.

every dollar of saving by some consumer is a dollar of spending by some other consumer.

                d.

the number of firms is equal to the number of households in an economy.

 

                                               

•             Question 4

               

                According to the circular-flow diagram GDP                                        

                               

Answers:             a.

can be computed as either the revenue firms receive from the sales of goods and services or the payments they make to factors of production.

                b.

can be computed as the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production.

                c.

can be computed as payments firms make to factors of production but not as revenues they receive from the sales of goods and services.

                d.

cannot be computed as either the revenue firms receive or the payments they make to factors of production.

 

                                               

•             Question 5

               

                Changes in nominal GDP reflect                                               

                               

Answers:             a.

only changes in prices.

                b.

neither changes in prices nor changes in the amounts being produced.

                c.

only changes in the amounts being produced.

                 d.

both changes in prices and changes in the amounts being produced.

                                               

•             Question 6

               

                When the consumer price index rises, the typical family                                               

                               

Answers:             a.

has to spend more dollars to maintain the same standard of living.

                b.

can spend fewer dollars to maintain the same standard of living.

                c.

can offset the effects of rising prices by saving more.

                d.

finds that its standard of living is not affected.

                                               

•             Question 7

               

                Harry spent $39,000 in 2009 and $42,000 in 2014 on goods and services. The consumer price index was 220 for 2009 and 231 for 2014. Harry’s 2014 spending in 2009 dollars is about                                 

                               

Answers:             a.

$40,000.

                b.

$44,100.

                c.

$40,091.

                d.

$37,838.

 

 

 

               

                                               

•             Question 8

               

                If the consumer price index was 100 in the base year and 106 in the following year, then the inflation rate was                                  

                               

Answers:             a.

106 percent.

                b.

10.6 percent.

                 c.

6 percent.

                d.

1.06 percent.

                                               

•             Question 9

               

                Table 24-10

 

The table below shows the prices of baseballs and baseball bats for three years. Assume the typical consumer’s basket consists of 6 baseballs and 2 baseball bats.

 

Year       Price of a

Baseball               Price of a

Baseball Bat

2008       $3.25     $75

2009       $3.75     $82

2010       $4.50     $96

 

Refer to Table 24-10. If 2008 is the base year, then the consumer price index was                                            

                               

Answers:             a.

100.00 in 2008, 117.00 in 2009, and 132.50 in 2010.

                b.

100.00 in 2008, 110.03 in 2009, and 117.43 in 2010.

                c.

169.50 in 2008, 186.50 in 2009, and 219.00 in 2010.

                 d.

100.00 in 2008, 110.03 in 2009, and 129.20 in 2010.

 

 

 

 

 

                                               

•             Question 10

               

                From 2013 to 2014, the CPI for medical care increased from 150 to 159. What was the inflation rate for medical care?                                               

                               

Answers:             a.

9.0 percent

                 b.

6.0 percent

                c.

5.7 percent

                d.

59.0 percent

                                               

 Review Test Submission: Quiz 4

               

•             Question 1

               

                Beth, an American citizen, travels to Italy on vacation and buys an espresso machine to bring home.  Her purchase increases                                            

                               

Answers:             a.

Italy's GDP.

                b.

Neither U.S. nor Italy's GDP, since the product was bought in one country and used in another.

                c.

Italy's GDP and U.S. GDP, since Beth spent dollars buying the machine.

                d.

U.S. GDP since she will have the machine with her at home in the U.S.

                                               

•             Question 2

               

                If in some year nominal GDP was $18 billion and the GDP deflator was 120, what was real GDP?                                

                               

Answers:             a.

$38 billion.

                 b.

$15 billion.

                c.

$6.7 billion.

                d.

$21.6 billion.

 

 

•             Question 3

               

                For an economy as a whole, income must equal expenditure because                                   

                               

Answers:             a.

individuals can only spend what they earn each period.

                 b.

every dollar of spending by some buyer is a dollar of income for some seller.

                c.

every dollar of saving by some consumer is a dollar of spending by some other consumer.

                d.

the number of firms is equal to the number of households in an economy.

 

                                               

•             Question 4

               

                According to the circular-flow diagram GDP                                        

                               

Answers:             a.

can be computed as either the revenue firms receive from the sales of goods and services or the payments they make to factors of production.

                b.

can be computed as the revenue firms receive from the sales of goods and services but not as the payments they make to factors of production.

                c.

can be computed as payments firms make to factors of production but not as revenues they receive from the sales of goods and services.

                d.

cannot be computed as either the revenue firms receive or the payments they make to factors of production.

 

                                               

•             Question 5

               

                Changes in nominal GDP reflect                                               

                               

Answers:             a.

only changes in prices.

                b.

neither changes in prices nor changes in the amounts being produced.

                c.

only changes in the amounts being produced.

                 d.

both changes in prices and changes in the amounts being produced.

                                               

•             Question 6

               

                When the consumer price index rises, the typical family                                               

                               

Answers:             a.

has to spend more dollars to maintain the same standard of living.

                b.

can spend fewer dollars to maintain the same standard of living.

                c.

can offset the effects of rising prices by saving more.

                d.

finds that its standard of living is not affected.

                                               

•             Question 7

               

                Harry spent $39,000 in 2009 and $42,000 in 2014 on goods and services. The consumer price index was 220 for 2009 and 231 for 2014. Harry’s 2014 spending in 2009 dollars is about                                 

                               

Answers:             a.

$40,000.

                b.

$44,100.

                c.

$40,091.

                d.

$37,838.

 

 

 

               

                                               

•             Question 8

               

                If the consumer price index was 100 in the base year and 106 in the following year, then the inflation rate was                                  

                               

Answers:             a.

106 percent.

                b.

10.6 percent.

                 c.

6 percent.

                d.

1.06 percent.

                                               

•             Question 9

               

                Table 24-10

 

The table below shows the prices of baseballs and baseball bats for three years. Assume the typical consumer’s basket consists of 6 baseballs and 2 baseball bats.

 

Year       Price of a

Baseball               Price of a

Baseball Bat

2008       $3.25     $75

2009       $3.75     $82

2010       $4.50     $96

 

Refer to Table 24-10. If 2008 is the base year, then the consumer price index was                                            

                               

Answers:             a.

100.00 in 2008, 117.00 in 2009, and 132.50 in 2010.

                b.

100.00 in 2008, 110.03 in 2009, and 117.43 in 2010.

                c.

169.50 in 2008, 186.50 in 2009, and 219.00 in 2010.

                 d.

100.00 in 2008, 110.03 in 2009, and 129.20 in 2010.

 

 

 

 

 

                                               

•             Question 10

               

                From 2013 to 2014, the CPI for medical care increased from 150 to 159. What was the inflation rate for medical care?                                               

                               

Answers:             a.

9.0 percent

                 b.

6.0 percent

                c.

5.7 percent

                d.

59.0 percent