The Economics of Money, Banking and Financial Markets 13th Global Edition Test bank

Answer:  C
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
3) Which of the following items are NOT counted in U.S. GDP?
A) your purchase of a new Ford Mustang
B) your purchase of new tires for your old car
C) GM's purchase of tires for new cars
D) a foreign consumer's purchase of a new Ford Mustang
Answer:  C
Question Status:  Previous Edition
AACSB:  Reflective Thinking
 
4) If an economy has aggregate output of $20 trillion, then aggregate income is
A) $10 trillion.
B) $20 trillion.
C) $30 trillion.
D) $40 trillion.
Answer:  B
Question Status:  Previous Edition
AACSB:  Analytical Thinking
 
5) When the total value of final goods and services is calculated using current prices, the resulting measure is referred to as
A) real GDP.
B) the GDP deflator.
C) nominal GDP.
D) the index of leading indicators.
Answer:  C
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
6) Nominal GDP is output measured in ________ prices while real GDP is output measured in ________ prices.
A) current; current
B) current; fixed
C) fixed; fixed
D) fixed; current
Answer:  B
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
7) GDP measured with constant prices is referred to as
A) real GDP.
B) nominal GDP.
C) the GDP deflator.
D) industrial production.
Answer:  A
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
8) If your nominal income in 2014 was $50,000, and prices doubled between 2014 and 2017, to have the same real income, your nominal income in 2017 must be
A) $50,000.
B) $75,000.
C) $90,000.
D) $100,000.
Answer:  D
Question Status:  Previous Edition
AACSB:  Analytical Thinking
 
9) If your nominal income in 2014 is $50,000, and prices increase by 50% between 2014 and 2017, then to have the same real income, your nominal income in 2017 must be
A) $50,000.
B) $75,000.
C) $100,000.
D) $150,000.
Answer:  B
Question Status:  Previous Edition
AACSB:  Analytical Thinking
 

 
10) To convert a nominal GDP to a real GDP, you would use
A) the PCE deflator.
B) the CPI measure.
C) the GDP deflator.
D) the PPI measure.
Answer:  C
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
11) If nominal GDP in 2001 is $9 trillion, and 2001 real GDP in 1996 prices is $6 trillion, the GDP deflator price index is
A) 7.
B) 100.
C) 150.
D) 200.
Answer:  C
Question Status:  Previous Edition
AACSB:  Analytical Thinking
 
12) When prices are measured in terms of fixed (base-year) prices they are called ________ prices.
A) nominal
B) real
C) inflated
D) aggregate
Answer:  B
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
13) The measure of the aggregate price level that is most frequently reported in the media is the
A) GDP deflator.
B) producer price index.
C) consumer price index.
D) household price index.
Answer:  C
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
14) The measure of the aggregate price level that is frequently the focus of Federal Reserve officials is the
A) consumer price index.
B) producer price index.
C) GDP deflator.
D) PCE deflator.
Answer:  D
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
15) To calculate the growth rate of a variable, you will
A) calculate the percentage change from one time period to the next.
B) calculate the difference between the two variables.
C) add the ending value to the beginning value.
D) divide the increase by the number of time periods.
Answer:  A
Question Status:  Previous Edition
AACSB:  Application of Knowledge
 
16) If real GDP grows from $10 trillion in 2002 to $10.5 trillion in 2003, the growth rate for real GDP is
A) 5%.
B) 10%.
C) 50%.
D) 0.5%.
Answer:  A
Question Status:  Previous Edition
AACSB:  Analytical Thinking
 
17) If real GDP in 2002 is $10 trillion, and in 2003 real GDP is $9.5 trillion, then real GDP growth from 2002 to 2003 is
A) 0.5%.
B) 5%.
C) 0%.
D) -5%.
Answer:  D
Question Status:  Previous Edition
AACSB:  Analytical Thinking