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289. Nominal GDP differs from real GDP because
290.
Refer to the accompanying graph. The year 2000 must be the
27-142
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
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
27-144
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
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
27-146
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
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
27-147
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
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
27-148
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
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?
27-149
Copyright © 2018 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
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
