Question

1. If real GDP in 2016 using 2015 prices is higher than nominal GDP of 2016, then

O A. nominal GDP in 2016 equals nominal GDP in 2015.

O B. real GDP in 2016 is larger than real GDP in 2015.

O C. prices in 2016 are higher than prices in the base year.

O D. prices in 2016 are lower than prices in the base year.

2. When GDP is measured using "adjustments for price changes" it is known as the

O A. nominal GDP.

O B. real GNP,

O C. real GDP.

O D. nominal GNP.

3. Between a trough and a peak, the economy goes through a(n)

O A. recession.

O B. expansion.

O C. bust

O D. hyperinflation.

4. Classiiying discouraged workers as unemployed would

O A. have an indeterminate impact on the unemployment rate.

O B. increase the unemployment rate.

O C. not change the unemployment rate.

O D・ decrease the unemployment rate.

5. In which of the following markets are funds demanded and supplied?

O A. the factor market

O B. the money market

O C. the goods and services market

O D. the labor market

6. Which of the following is included in both the U.S. GDP and GNP?

O A. The value of cars produced by Nissan in Japan and the U.S.

O B. The value of all cars produced by Ford in Mexico.

O C. The value of all cars produced by General Motors in the U.S.

O D・ The value of all cars produced by Toyota in the U.S.

Answer 1

(1) Nominal GDP in 2016 = Output of 2016 * Price of 2016.

Real GDP in 2016 using 2015 prices = Output of 2016 * Prices of 2015.

2015 is the base year

If real GDP in 2016 using 2015 prices is greater than the nominal GDP in 2016, then it implies that the prices in 2015 is higher than the prices in 2016 (or prices in 2016 is lower than the prices in 2015 )

Answer: Option (D)

(2) When GDP is measured using "adjustments for price changes" it is known as the real GDP.

Answer: Option (C)

(3) Between a trough and a peak, the economy goes through a(n) expansion.

Answer: Option (B)

(4) Generally discouraged workers does not consider as unemployed and a part of the labor force.

Classifying discouraged workers as unemployed would increase the unemployed people officially and increase the labor force.

Hence, it will increase the unemployment rate.

Answer: Option (B)

(5) In the money market funds are demanded and supplied.

Answer: Option (B)

(6) The value of all cars produced by General Motors in the US would be included in both US GDP and US GNP

Answer: Option (C).