Macro

Please find the attachment 

  

1- If inventories increase, which of the following will increase?

 

 

Consumer spending

Government Spending

GDP (Gross Domestic Product)

Net Exports

2- Which of the following will be included in GDP?

  

  

  

  

  

  

							Bread purchased by a consumer to make sandwiches that he/she will eat
Bread purchased by a restaurant to make sandwiches
Government social security payments to households
Goods produced by US citizens in another country (and purchased in another country)
Goods produced by US citizens in the US and consumed by people in another country
The sale of a used car
An oven purchased by a restaurant

3- Which of the following statements is true?

Real GDP is nominal GDP added to the price index (in hundredths).

Real GDP is nominal GDP subtracted from the price index (in hundredths).

Real GDP is nominal GDP multiplied by the price index (in hundredths).

Real GDP is nominal GDP divided by the price index (in hundredths).

4- 4- Top of Form

Suppose that incomes increase and bicycles are an inferior good.  What will happen to the equilibrium price of bicycles (type “increase” on “decrease”)?

 

Bottom of Form

5- Suppose that the price of sugar increases.  What will happen to the equilibrium QUANTITY of cupcakes, assuming sugar is an input in production?  Type “increase” or “decrease” in the box.

 

6-Top of Form

Consider the market for Apple stocks.  You may assume we’re talking about the secondary market, and that the suppliers are current stockholders.  Suppose that a rumor comes out that iphones might start to explode.  Seeing this, people expect that the price of Apple stocks is going to drop dramatically in the next few days.  What will happen to the supply of Apple stocks TODAY?  Type “increase” or “decrease” in the box.

 
Bottom of Form

7-

Suppose that in 1984 the total output in a single-good economy was 7,000 buckets of chicken and that the price of each bucket of chicken was $10. In

200

5 the price per bucket of chicken was $16 and 22,000 buckets were produced.
Determine the GDP price index for 1984, using 2005 as the base year.  Assume that the market basket is one bucket of chicken.  Again, note that 2005 is the base year.
Instruction: Enter your response as an index number rounded to one decimal place.
GDP price index = 

What were the amounts of real GDP in 1984 and 2005?
In 1984 real GDP =

$

In 2005 real GDP = $
What was the growth rate of Real GDP between 1984 and 2005?   %  Round your answer to the nearest percent.  For example, if it is 1.25%, say 1%.

8-

The following table shows nominal GDP and an appropriate price index for a group of selected years.  Compute real GDP.  Round your answers to two decimal places.  For example, if it is

100

.253, write 100.25.  Note that

1968

is the base year.
Instructions: Round your answers to two decimal places.

 

100

$

 

$

 

$

 

$

 

Year	Nominal GDP, (Billions)	Price Index (Year 1968 = 100)	Real GDP (Billions)	Ignore this column
1968	$ 70		100					$
1978	140
1988	125	167
1998	135	175
2008	160	200

9-

The data for a hypothetical economy in a given year are as follows: 

Category	Value
Personal consumption expenditures	$50 billion
Purchases of stocks and bonds	$30 billion
Net exports	−$10 billion
Government purchases	$20 billion
Purchases of intermediate goods	$8 billion
Gross Private Domestic investment	$25 billion

The GDP for this economy is $____ billion (type the number)

 

10-

Which of the following does GDP represent?

Total income to factors

Total expenditures on final goods and services

Total value-added in production

All of the above

11-

Consider the market for tennis shoes.  Which of the following will increase the price of tennis shoes, assuming a competitive market?

A decrease in the price of rubber, an input in the production of tennis shoes

An increase in the price of shoelaces, if tennis shoes and shoelaces are complementary goods

An increase in the price of sandals, if sandals and tennis shoes are substitute goods

A decrease in incomes, if tennis shoes are normal goods