978-1259723223 Test Bank TBChap027 Part 8

289. Nominal GDP differs from real GDP because

290.

Refer to the accompanying graph. The year 2000 must be the

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written consent of McGraw-Hill Education.

Blooms: Understand

Difficu l t y :

02 Medium

Learning Objective: 27-05 Discuss the nature and function of a GDP price index and

describe the difference between nominal GDP and real GDP.

Test Bank: II

Topic:

Nominal GDP versus Real GDP

Type: Graph

291.

Refer to the accompanying graph. It suggests that the GDP price index during the period

shown was generally

292.

Refer to the accompanying graph. Which of the following statements is correct on the basis

of the information shown?

293. Nominal GDP has generally risen more rapidly than real GDP since World War II in

the United States, suggesting that

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written consent of McGraw-Hill Education.

D. world trade has increased.

294. If real GDP declines in a given year, nominal GDP

295. In year 1, nominal GDP for the United States was $2,250 billion and in year 2 it was

$2,508 billion. The GDP deflator was 72 in year 1 and 79 in year 2. Between year 1 and

year 2, real GDP rose by

296. One year nominal GDP was $286 billion and the price index was 88. Real GDP that

year was

297. If real GDP in a year was $3,668 billion and the price index was 112, then nominal

GDP in that year was approximately

298. Over a year, a nation‘s GDP at current prices rose by 15 percent, while the price index

increased from 100 to 110. GDP at constant prices rose by about

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written consent of McGraw-Hill Education.

A c c e s s i b i l i t y :

Keyboard Navigation

Blooms: Understand

Difficulty:

02 Medium

Learning Objective: 27-05 Discuss the nature and function of a GDP price index and

describe the difference between nominal GDP and real GDP.

Test Bank: II

Topic:

Nominal GDP versus Real GDP

299. Over a period of time, a nation’s GDP increases by 8 percent in constant-price terms

and by 6 percent in current-price terms. Other things being equal, the price level must have

changed by about

300.

Year

Nominal GDP

Price Index

1

$3,166

100

2

3,402

104

3

3,774

108

4

3,989

112

Refer to the accompanying data, using year 1 as the base year. All dollars are in billions.

Real GDP in year 4 was approximately

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written consent of McGraw-Hill Education.

C. $3,774 billion.

D. $3,494 billion.

301.

Year

Nominal GDP

Price Index

1

$3,166

100

2

3,402

104

3

3,774

108

4

3,989

112

Refer to the accompanying data, using year 1 as the base year. All dollars are in billions.

Real GDP increased from year 3 to year 4 by approximately

302. GDP understates the amount of economic production in the United States because it

excludes

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written consent of McGraw-Hill Education.

D.

work performed by people for their own benefit.

303. The value of transactions in the underground economy is estimated to be about what

percentage of GDP in the United States?

304. GDP tends to overstate economic well-being because it takes into account

305. GDP does not include which of the following activities?

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written consent of McGraw-Hill Education.

A. businesses installing anti-pollution equipment

B. households spending to enhance security of their neighborhoods

C.

couples remodeling their own homes

D. families eating out in restaurants

306. GDP tends to overstate economic well-being because it takes into account

307. GDP excludes most nonmarket transactions. Therefore, GDP tends to

308. GDP estimates account for which of the following items?

309. GDP tends to underestimate the productive activity in the economy because it

excludes the value of output from

310. Gordon sells narcotics “on the street.” This type of illegal activity

311. The service a homeowner performs when she mows her yard is not included in GDP

because

312. The “underground economy” is mostly made up of

313. The gross domestic product is not a good measure of the standard of living in a nation

because it