37. If nominal GDP is $10 trillion and real GDP is $12 trillion, then the GDP deflator is
a.
83.33, and this indicates that the price level has decreased by 16.67 percent since the base year.
b.
83.33, and this indicates that the price level has increased by 83.33 percent since the base year.
c.
120, and this indicates that the price level has increased by 20 percent since the base year.
d.
120, and this indicates that the price level has increased by 120 percent since the base year.
38. If nominal GDP is $10 trillion and real GDP is $8 trillion, then the GDP deflator is
a.
80, and this indicates that the price level has decreased by 20 percent since the base year.
b.
80, and this indicates that the price level has increased by 80 percent since the base year.
c.
125, and this indicates that the price level has increased by 25 percent since the base year.
d.
125, and this indicates that the price level has increased by 125 percent since the base year.
39. If nominal GDP is $8 trillion and real GDP is $10 trillion, then the GDP deflator is
a.
80, and this indicates that the price level has decreased by 20 percent since the base year.
b.
80, and this indicates that the price level has increased by 80 percent since the base year.
c.
125, and this indicates that the price level has increased by 25 percent since the base year.
d.
125, and this indicates that the price level has increased by 125 percent since the base year.
40. Suppose an economy’s production consists only of corn and soybeans. In 2010, 20 bushels of corn are sold at $4 per
bushel and 10 bushels of soybeans are sold at $2 per bushel. In 2009, the price of corn was $2 per bushel and the price of
soybeans was $1 per bushel. Using 2009 as the base year, it follows that, for 2010,
a.
nominal GDP is $50, real GDP is $100, and the GDP deflator is 50.
b.
nominal GDP is $50, real GDP is $100, and the GDP deflator is 200.
c.
nominal GDP is $100, real GDP is $50, and the GDP deflator is 50.
d.
nominal GDP is $100, real GDP is $50, and the GDP deflator is 200.
41. Suppose an economy produces only eggs and ham. In 2009, 100 dozen eggs are sold at $3 per dozen and 50 pounds of
ham sold at $4 per pound. In 2010, the base year, eggs sold at $1.50 per dozen and ham sold at $5 per pound. For 2009,
a.
nominal GDP is $400, real GDP is $500, and the GDP deflator is 80.
b.
nominal GDP is $400, real GDP is $500, and the GDP deflator is 125.
c.
nominal GDP is $500, real GDP is $400, and the GDP deflator is 80.
d.
nominal GDP is $500, real GDP is $400, and the GDP deflator is 125.
42. Suppose an economy produces only cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per
unit and 100 units of maple syrup are sold at $8 per unit. In 2009, the base year, the price of cranberries was $10 per unit
and the price of maple syrup was $15 per unit. For 2010,
a.
nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 90.
b.
nominal GDP is $1800, real GDP is $2000, and the GDP deflator is 111.1.
c.
nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 90.
d.
nominal GDP is $2000, real GDP is $1800, and the GDP deflator is 111.1.
43. Suppose an economy produces only cheese and fish. In 2010, 20 units of cheese are sold at $5 each and 8 units of fish
are sold at $50 each. In 2009, the base year, the price of cheese was $10 per unit and the price of fish was $75 per unit.
For 2010,
a.
nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5.
b.
nominal GDP is $500, real GDP is $800, and the GDP deflator is 160.
c.
nominal GDP is $800, real GDP is $500, and the GDP deflator is 62.5.
d.
nominal GDP is $800, real GDP is $500, and the GDP deflator is 160.
44. Suppose an economy produces only iPhones and bananas. In 2010, 1000 iPhones are sold at $300 each and 5000
pounds of bananas are sold at $3 per pound. In 2009, the base year, iPhones sold at $400 each and bananas sold at $2 per
pound. For 2010,
a.
nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 76.83.
b.
nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 130.16.
c.
nominal GDP is $315,000, real GDP is $410,000, and the GDP deflator is 130.16.
d.
nominal GDP is $410,000, real GDP is $315,000, and the GDP deflator is 76.83.
45. Suppose an economy produces only burgers and bags of fries. In 2010, 4000 burgers are sold at $3 each and 6000 bags
of fries are sold at $1.50 each. In 2008, the base year, burgers sold for $2.50 each and bags of fries sold for $2 each.
a.
nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 95.45.
b.
nominal GDP is $22,000, real GDP is $21,000, and the GDP deflator is 104.77.
c.
nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 95.45.
d.
nominal GDP is $21,000, real GDP is $22,000, and the GDP deflator is 104.77.
46. A country reported nominal GDP of $100 billion in 2010 and $75 billion in 2009. It also reported a GDP deflator of
125 in 2010 and 120 in 2009. Between 2009 and 2010,
a.
real output and the price level both rose.
b.
real output rose and the price level fell.
c.
real output fell and the price level rose.
d.
real output and the price level both fell.
47. A country reported nominal GDP of $200 billion in 2010 and $180 billion in 2009. It also reported a GDP deflator of
125 in 2010 and 105 in 2009. Between 2009 and 2010,
a.
real output and the price level both rose.
b.
real output rose and the price level fell.
c.
real output fell and the price level rose.
d.
real output and the price level both fell.
48. A country reported nominal GDP of $115 billion in 2010 and $125 billion in 2009. It also reported a GDP deflator of
85 in 2010 and 100 in 2009. Between 2009 and 2010,
a.
real output and the price level both rose.
b.
real output rose and the price level fell.
c.
real output fell and the price level rose.
d.
real output and the price level both fell.
49. A country reported a nominal GDP of $85 billion in 2010 and $100 billion in 2009. It also reported a GDP deflator of
100 in 2010 and 105 in 2009. Between 2009 and 2010,
a.
real output and the price level both rose.
b.
real output rose and the price level fell.
c.
real output fell and the price level rose.
d.
real output and the price level both fell.
Table 23-4
The table below reports nominal and real GDP for the U.S. from 1929 to 1932.
Year
Nominal
GDP
Real GDP
1929
103.6
977
1930
91.2
892.8
1931
76.5
834.9
1932
58.7
725.8
50. Refer to Table 23–4. What are the GDP deflator and the inflation rate for 1931?
a.
9.16, -11.5
b.
9.16, -10.3
c.
1091.37, 10.3
d.
1091.37, 11.5
51. Refer to Table 23–4. What are the GDP deflator and the inflation rate for 1932?
a.
8.09, -11.7
b.
8.09, -13.3
c.
1236.46, 11.7
d.
1236.46, 13.3
52. Refer to Table 23–4. What was the growth rate of real GDP for 1930?
a.
-8.62%. Real GDP is a better gauge of economic well-being than nominal GDP.
b.
-8.62%. Nominal GDP is a better gauge of economic well-being than real GDP.
c.
-9.43%. Real GDP is a better gauge of economic well-being than nominal GDP.
d.
-9.43%. Nominal GDP is a better gauge of economic well-being than real GDP.
53. Refer to Table 23–4. What was the growth rate of real GDP for 1931?
a.
-6.93%. Real GDP is a better gauge of economic well-being than nominal GDP.
b.
-6.93%. Nominal GDP is a better gauge of economic well-being than real GDP.
c.
-6.49%. Real GDP is a better gauge of economic well-being than nominal GDP.
d.
-6.49%. Nominal GDP is a better gauge of economic well-being than real GDP.
54. Refer to Table 23–4. If prices had remained constant between 1929 and 1930, Nominal GDP would have decreased
a.
8.62%.
b.
9.43%.
c.
11.97%.
d.
13.6%.
Table 23-5
The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are
shown below. The base year is 2015.
Prices and Quantities
Year
Price of Cereal
Quantity of
Cereal
Price of Milk
Quantity of
Milk
2015
$4.00
100
$1.50
180
2016
$4.00
120
$2.00
200
2017
$5.00
150
$2.50
200
2018
$6.00
180
$3.50
240
55. Refer to Table 23–5. In 2015, this country’s
a.
nominal GDP was greater than real GDP, and the GDP deflator was greater than 100.
b.
nominal GDP was equal to real GDP, and the GDP deflator was equal to 100%.
c.
nominal GDP was less than real GDP, and the GDP deflator was less than 100.
d.
nominal GDP was equal to real GDP, and the GDP deflator was equal to 100.
56. Refer to Table 23–5. In 2016, this country’s
a.
real GDP was $880, and the GDP deflator was 111.4.
b.
real GDP was $780, and the GDP deflator was 88.6.
c.
real GDP was $880, and the GDP deflator was 112.8.
d.
real GDP was $780, and the GDP deflator was 112.8.
57. Refer to Table 23–5. In 2017, this country’s
a.
real GDP was $900, and the GDP deflator was 138.9.
b.
real GDP was $1250, and the GDP deflator was 128.0.
c.
real GDP was $900, and the GDP deflator was 128.0.
d.
real GDP was $1250, and the GDP deflator was 138.9.
58. Refer to Table 23–5. In 2018, this country’s
a.
real GDP was $1080, and the GDP deflator was 156.3.
b.
real GDP was $1080, and the GDP deflator was 177.8.
c.
real GDP was $1920, and the GDP deflator was 177.8.
d.
real GDP was $1920, and the GDP deflator was 156.3.
59. Refer to Table 23–5. This country’s output grew
a.
31.3% from 2015 to 2016.
b.
42.0% from 2016 to 2017.
c.
15.4% from 2016 to 2017.
d.
53.6% from 2017 to 2018.
60. Refer to Table 23–5. This country’s inflation rate from 2017 to 2018 was
a.
20.0%.
b.
21.8%.
c.
38.9%.
d.
28.0%.
61. Refer to Table 23–5. This country’s inflation rate from 2016 to 2017 was
a.
25.0%.
b.
23.1%.
c.
26.1%.
d.
18.8%.
Table 23–10
A hypothetical country of Lahland produces only movies and popcorn. Quantities and prices of these goods for the last
several years are shown below. The base year is 2015 .
Prices and Quantities
Year
Price of
Movies
Quantity of
Movies
Price of Popcorn
Quantity of
Popcorn
2014
$10.00
500
$5
1000
2015
$11.00
600
$4
900
2016
$12.00
650
$5
950
2017
$12.00
625
$6
925
62. Refer to Table 23–10. In which year was this country’s nominal GDP highest?
a.
2014
b.
2015
c.
2016
d.
2017
63. Refer to Table 23–10. In which year was this country’s real GDP highest?
a.
2014
b.
2015
c.
2016
d.
2017
64. Refer to Table 23–10. What was this country’s nominal GDP in 2014?
a.
$9,500
b.
$10,000
c.
$10,200
d.
$10,500
65. Refer to Table 23–10. What was this country’s real GDP in 2016?
a.
$10,575
b.
$11,250
c.
$10,950
d.
$12,550
66. Refer to Table 23–10. What was this country’s GDP deflator in 2017?
a.
123.4
b.
116.7
c.
120.0
d.
None of the above is correct.