Macroeconomics
21st Edition
ISBN: 9781259915673
Author: Campbell R. McConnell, Stanley L. Brue, Sean Masaki Flynn Dr.
Publisher: McGraw-Hill Education
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Question
Chapter 6, Problem 1RQ
To determine
Nominal GDP and Real GDP.
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Students have asked these similar questions
_________ is output per hour in the business sector.
a)GDP per capita
b)Investment
c)Productivity
d)Net exports
Read the news clip, then answer the following question.
The statement that total sales by businesses were up 0.3 percent means that
GDP
because
OA. Increased by 0.3 percent; GDP is a record of the value of all production
B. decreased by 0.3 percent; "total sales by businesses are sales of
intermediate goods and services
OC. did not change by 0.3 percent, GDP measures production of all final goods
and services and "total sales by businesses includes final and intermediate
goods and services
OD. increased by less than 0.3 percent; we need to subtract retail sales of 1.3
percent from the total sales by businesses to eliminate double counting
OE. increased by more than 0.3 percent; "total sales by businesses includes
only sales of intermediate goods and services
Expansion remains slow
The Commerce Department reported that retail sales increased 1.3 percent in
Net exports were up 0.8 percent in the first quarter and inventories held by
businesses rose by 0.3 percent in June. Total sales by…
When an economy is at the peak of the business cycle _____________.
a.
GDP remains unchanged
b.
GDP level will be low
c.
GDP starts falling
d.
GDP level will be high
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Similar questions
- a. If nominal GDP rose, does that mean that production had to increase as well? Why or why not?An increase in nominal GDP means there must have been an increase in inputs. may have been due to an increase in the price level. means production must have increased. means production must have decreased.b. What about if real GDP increased?An increase in real GDP may have been due to an increase in the price level. means production must have increased because the price level is not held constant. means production must have decreased. means production must have increased because the price level is held constant.c. Why is it important to use real GDP when comparing changes over time?Changes in real GDP over time will accurately reflect changes in real production. should not be used. We should use changes in nominal GDP when analyzing changes over time. have a time lag, which helps us accurately predict business cycles. will include changes in the price level, which gives a complete picture.arrow_forwardSuppose that Indonesia's national production function is Y = K 05L 05, where K is the amount of land and Lis the amount of labor. The economy starts when the amount of land owned is 100 units and the number of workers is 100 units. Calculate the following indicators. a. How much output is produced? b. What are the labor wages and land rent? c. What is the share of the output received by labor? d. If a natural disaster occurs that causes the population to be reduced by half, what is the new level of national output? e. What are the new rates of labor wages and land rent? f. What share of output does the labor receive now?arrow_forward1 a. US GDP was 14,419 billion in 2009 and 14,964 billion in 2010. What was the percentage increase in GDP over this period? Show your workarrow_forward
- The production of goods and services valued at current prices is called real GDP. Select one: a. False b. Truearrow_forwardIn the graph you've just explored, when did the most recent expansion begin? The most recent expansion began _____. A. At the trough in 2009 B. at the peak in 2007 C. in 2005 D. in 2008 when real GDP equaled potential GDParrow_forwardA) Macroeconomics is concerned with: only long-run trends in economic activity. only short-run fluctuations in the business cycle. both long-run trends and short-term fluctuations in economic activity. only with changes in the overall price level. GDP is: a) a measure of all spending in the economy on foreign and domestic goods and services. b) the total market value of all final goods and services produced in an economy in a given year. c) the value of all output produced within an economy. d) made up of three components: consumption, investment, and government expenditure.arrow_forward
- Potential GDP is ______$ Ss attachedarrow_forwardUse the following graph to answer the next two questions. 350 300- 250 200 150 100- 50 Real GDP 04 0 An function. 100 in O increase; capital increase; output O advance; technology O increase; depreciation increase; investment 200 300 400 500 Capital 600 would cause an upward shift of the productionarrow_forwardWhat are typical GDP patterns for a high-income economy like the United States in the long run and the short run?arrow_forward
- An economy produces capital and consumer goods. Discuss the impact on the PFF due to the following: a) The discovery of a new source of oil. b) The unemployment rate in the economy has decreased by 5%. c) Improved technology that impacts the production of capital goods.arrow_forwardIf a consumer purchases a foreign-produced hair dryer at a department store, the value of the hair dryer is: a. included in both consumer purchases and exports. b. added to capital investment in equipment but then subtracted from consumer purchases. c. included in consumer purchases but then subtracted as part of imports. d. added to imports but then subtracted as part of exports. Please explain your answerarrow_forwardConsider a small country that produces and consumes only two goods: coffee and bananas. The quantity produced and price of each good in 2018 and 2019 are provided in the table below. Year 2018 Coffee Bananas Year 2019 Coffee Bananas The real GDP for year 2018 is: $ The real GDP for year 2019is: $ The growth of the real GDP is: Quantity % 650 pounds 300 pounds Quantity 700 pounds 330 pounds Price $5.5 per pound $0.4 per pound Assume that 2019 is the base year and round your response to two decimal places. (e.g. $963.45, 5.69%) The nominal GDP for year 2018 is: The nominal GDP for year 2019is: $ Price $6.0 per pound $0.5 per pound The GDP Deflator in 2018 is: The GDP Deflator in 2019 is: The inflation rate between the two years using the GDP deflator is. % Assume the average consumer buys 1 pound of coffee and 2 pounds of Bananas. Assume that 2019 is the base year and round your response to two decimal places. (e.g. $963.45, 5.69%) The consumer price index for 2018 is: The consumer price…arrow_forward
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