Macroecon Ptest Gdp Deflator Essay

2436 Words Dec 3rd, 2012 10 Pages
PRE-TEST – ANSWER KEY
Econ 361, 1st Hourly Prof. Khan Mohabbat

1. The broadest measure of the aggregate price level is the a) GDP deflator.* b) consumer price index. c) producer price index. d) d. gross domestic product. 2. If the value of a price index was 125 for 2005 and 75 for 1982, and GDP was 2500 in 2005 compared to 600 in 1982, the value of real 2005 GDP in terms of 1982 prices is a) 1500.* b) 1000. c) 2500. d) 360. 3. The index that measures the change in price of a typical basket of consumer goods is a) the GDP deflator. b) the consumer price index.* c) nominal GDP. d) real GDP. 4. Personal income equals personal disposable income plus a) payroll taxes. b) transfer payments. c) dividend payments. d) personal saving. e)
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b) net change in inventories of materials used in the production process. c) included in investment when calculating GDP. d) Both a and b. e) All of the above.* 10. Business fixed investment a) includes the building of single- and multi-family housing units. b) is the change in business inventories. c) is the smallest subcomponent of investment. * d) consists of purchases of a newly produced plant and equipment. 11. Inventory investment is a) never positive. b) often negative. c) can be either negative or positive.* d) always positive. 12. Based on the data in Table 2-7, recessions in the U.S. are a) irregular in length but evenly spaced. b) rare. c) regularly spaced and regular in length. d) irregular in length and irregularly spaced.* 13. One factor which did not influence the levels of real output and employment in the classical system was the a) stock of capital. b) level of technology. c) the price level.* d) size of the labor force.

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14. The classical economists attacked the mercantilist propositions that a) state action was necessary to direct the capitalist system. b) money had no intrinsic value. c) output was completely supply-determined. d) the wealth of a nation was closely linked to the country’s stock of precious metals. e) Both a and d* 15. The supply of labor in the classical system is a function of the a) marginal product of labor. b) real wage. c) the public’s preference for leisure. d) money wage. e) b and c* 16. Which of

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