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Nominal GDP is measured in ______ prices and real GDP is measured in _______ prices. current; base-yearB. current; current C. base-year; currentD....
1. Nominal GDP is measured in ______ prices and real GDP is measured in _______ prices. A. current; base-year B. current; current C. base-year; current D. current; market E. market; current
2. The annual rate of inflation is the: A. price level B. consumer price index C. the average price of a given class of goods or services relative to the price of the same goods and services in a base year D the rate of growth of the nominal wage E. annual percentage change in the price level
3. If the nominal interest rate is 2% and the inflation rate is 3%, then the real interest rate equals: A. 5% B. -1% C. 1% D. 6% E. -5%
4. If real GDP is greater than potential GDP, then: A. the actual unemployment rate is less than the natural unemployment rate B. the actual unemployment rate equals zero C. the output gap is negative D. the actual unemployment rate is greater than the natural unemployment rate E. none of the above is true
5. If firms maintain prices in the short run, the primary cause of output gaps is changes in: A. capital and technology B. potential output C. prices D. aggregate expenditure E. wages
6. In the long run, output gaps are eliminated by: A. increasing potential output B. increased efficiency in labour markets C. price changes D. reducing potential output E. not changing potential output
7. Which of the following explains why unemployment tends to lag behind other measures of economic activity, particularly during recessions? A. Labour hoarding, where firms are reluctant to immediately fire workers in the event of a downturn B. More workers are joining the labour force C. More skilled workers are joining the labour force D. Wages start rising E. Mismeasurement of unemployment
8. The consumer price index measures this year's cost of: A. a changing basket of goods and services B. a standard consumer's basket of goods and services compared to the base year cost C. all goods and services purchased by consumers D. goods and services required to live above the poverty level E. producing all goods and services
9. Workers and employers expect 2% inflation and agree to a one-year nominal wage contract. Inflation turns out to be 1%, then: A. workers gain and employers gain B. workers gain and employers lose C. workers lose and employers lose D. workers lose and employers gain E. none of the above
10. Use the following data for an economy to answer the question: Year Price level Nominal GDP 2017 100 $1600 2018 110 $2200
Using 2017 as the base year, real GDP in 2018 was _____ and the annual growth rate of real GDP in 2018 was _________ A. 2200, 37.5% B. 2000, 25% C. 1600, 10% D. 2200, 25% E. 2000, 10%