2. Key facts about economic fluctua The following graph approximates business cycles in the United States from the first quarter of 1953 to the third quarter of 1957. The vertical blue bar coincides with periods of 6 or more months of declining real gross domestic product (real GDP). 2700 REAL GOP (Btions of dollar) 2400 1953 1954 1965 YEAR O False 1900 Source: "Curent-duar and Real COR Bureau of Economics Analysis, last modited May 1, 11, accesent May 15, 13, www.bea Notice that real GDP trends upward over time but experiences ups and downs in the short run. A period of declining real GDR such as the blue-shaded period in 1953, is known as True or False: Short-term fluctuations in real GDP are irregular and unpredictable. O True

2. Key facts about economic fluctua The following graph approximates business cycles in the United States from the first quarter of 1953 to the third quarter of 1957. The vertical blue bar coincides with periods of 6 or more months of declining real gross domestic product (real GDP). 2700 REAL GOP (Btions of dollar) 2400 1953 1954 1965 YEAR O False 1900 Source: "Curent-duar and Real COR Bureau of Economics Analysis, last modited May 1, 11, accesent May 15, 13, www.bea Notice that real GDP trends upward over time but experiences ups and downs in the short run. A period of declining real GDR such as the blue-shaded period in 1953, is known as True or False: Short-term fluctuations in real GDP are irregular and unpredictable. O True

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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FRED S s The Graph above shows the percentage growth in real GDP. Which phase of the business cycle describes the shaded periods? O Expansion O Contraction O Peak O Depression
Notebooks Calculators Large coffees Energy drinks Textbooks Total cost Price index Quantity in Basket 10 1 300 75 8 Price Cost (Dollars) (Dollars) 3 30 75 75 600 150 720 NN 90 Suppose the base year for this price index is 2017. Between 2017 and 2018, the CSPI increased by 2017 1,575 100 Price (Dollars) 3 80 2 4 110 2018 Cost (Dollars) In the last row of the table, calculate and enter the value of the CSPI for the remaining years. Price (Dollars) 4 104 2 5 120 % Between 2018 and 2019, the CSPI increased by 2019 Cost (Dollars) % Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of going to college? Check all that apply. A new type of personal transporter, which made it easier to get around places like university campuses, became available for purchase. Professors required each student to buy 10 notebooks, regardless of the price. As the price of energy drinks increased relative to the price of coffee between 2017…
11 GDP measures the value of new goods and services produced by American owned companies located in the United States. True False 12 Of the four spending categories, which is the largest for the United States economy? consumption spending government spending investment spending net export spending 13 D Consider the following information about a simple economy that produces two goods across two years. The base year is 2020. Donuts Coffee 2020 Price $1.25 $1.75 What is the value of real GDP in 2021? Round to two decimal places. Type your answer... 2020 Quantity 2021 Price 80 150 $1.35 $1.95 2021 Quantity 100 186
The seasonally adjusted data below depict the performance of the economy of the United States in five quarters of 1953-1954. Year/Quarter 1953/Q4 1954/Q1 1954/02 1954/Q3 1954/04 Select one: OA. 1953/04. Annual Percent Change Nominal GDP OB. 1954/01 O C. 1954/02. O D. 1954/03. QE. 1954/04. -5.2 -0.6 0.8 5.1 9.2 Real GDP in the United States was lowest in which of the following quarters? Annual Percent Change Real GDP -5.9 -1.9 0.4 4.6 8.1
GDP Table Transfer payments Government purchases 32 160 Personal taxes 76 Corporate Income taxes Taxes on production and imports 56 30 Social secunity contributions 16 Undistributed corporate profits Proprietors income 38 50 Compensation of employees Personal consumption expenditures Consumption of fived capital 516 644 Rents 66 Exports 28 Corporate profits 140 nterest 64 Dividends 46 Imports Gross private domestic investment Net foreign factor income eamed Statistical discrepancy 34 126 20 70 Refer to the above data. PI is: Oa. $702. Ob. Sy28. Oe S758. od. Sy26.
Using the table below, Pear Phone Year Price (S) Quantity Price (S) Quantity 2015 3 210 450 54 2016 4 200 500 50 14. Compute nominal GDP in each year. 15. By what percentage did the nominal GDP change between 2015 and 2016? 16. Compute real GDP each year by using "2015" as the base year. 17. By what percentage did real GDP change between 2015 and 2016? 18. By using the table and your answers to #15, and #17, explain (in one or two paragraphs) why "real GDP" is better than "nominal GDP" in measuring the production activity of an eçonomy. LA
2. Activities included (and not included) in the calculation ofGDP The gross domestic product (GDP) of the United States is defined as the all in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2018. 2018 GDP Scenario Included Excluded Calculo, a U.S. electronics company, produces a calculator at a plant in Indonesia on March 17, 2018. Calculo imports the calculator into the United States on May 21, 2018. Treetopplers, a U.S. lumber company, produces wood at a plant in Oregon on September 13, 2018. It sells the wood to Buildit and Partners, a developer, for use in the production of a new house that will be built in the United States in 2018. (Note: Focus exclusively on whether production of the wood increases GDP directly, and ignore the effect of production of the new house on GDP.) Zippycar, a U.S. automobile company, produces a convertible at a…
2015 2016 2017 P Q P Q P Q Onion 1,2 400 1,5 600 2,5 400 Tomato 1 320 2,5 200 4 400 Pepper 4 50 12 50 14 50 Assume that there are only 3 goods produced in the economy. As seen in the table above, price(P) and quantity(Q) of goods are given for each year. Base year is 2016. According to this, Calculate nominal GDP for each year Calculate real GDP for each year Calculate the growth rate for the years 2016 and 2017 Calculate the inflation in 2016 and 2017 by using GDP deflator
5. Real versus nominal GDP Consider a simple economy that produces two goods: cupcakes and envelopes. The following table shows the prices and quantities of the goods over a three-year period. Cupcakes Envelopes Price Quantity Price Quantity Year (Dollars per cupcake) (Number of cupcakes) (Dollars per envelope) (Number of envelopes) 2017 1 110 185 2018 155 200 2019 3 110 165 Use the information from the preceding table to fill in the folowing table. Nominal GDP Real GDP (Dollars) (Base year 2017, dollars) GDP Deflator Year 2017 2018 2019 From 2018 to 2019, nominal GDP and real GDP The inflation rate in 2019 was Why is real GDP a more accurate measure of an economy's production than nominal GDP? Real GDP is not influenced by price changes, but nominal GDP is. Real GDP measures the value of the goods and services an economy produces, but nominal GDP measures the value of the goods and services an economy consumes. O Real GDP includes the value of exports, but nominal GDP does not.
Transcribed Image Text:The price and quantity data for Year 1 and Year 2 are as follows: Bread 50 1 Butter 100 Year 1 Quantity Year 1 Price Year 2 Quantity Year 2 Price 80 120 1.60 1.25 What is the ratio of real GDP in year 2 to real GDP in year 1, using year 1 as the base year? Answer Choices: 1.254 b. 1.354 1.434 d. 1.534 a. C. Acivate Windcys
The following graph approximates business cycles in the United States from the first quarter of 1947 to the third quarter of 1951. The vertical blue bar coincides with periods of 6 or more months of declining real gross domestic product (real GDP). 1947194819491950195121702070197018701770REAL GDP (Billions of dollars)YEAR Source: “Current-dollar and Real GDP,” Bureau of Economics Analysis, last modified May 1, 13, accessed May 15, 13, http://www.bea.gov/national/xls/gdplev.xls. Notice that real GDP trends upward over time but experiences ups and downs in the short run. A period of declining real GDP, such as the blue-shaded period in 1948, is known as . True or False: Small ups and downs in real GDP follow a consistent, predictable pattern. True False Which of the following probably occurred as the U.S. economy experienced increasing real GDP in 1950? Check all that apply. Industrial production declined. Consumer spending increased.…
1. Key facts about economic fluctuations The graph included below approximates United States business cycles between quarter one of 1947 and quarter three of 1951. The shaded region denotes periods of six or more consecutive months of declining real gross domestic product (real GDP). [ 1949 1950 1951 YEAR REAL GDP (Billions of dollars) 2170 2070 1970 1870 1770 1947 Source: "Current-dollar and Real GDP," Bureau of Economics Analysis, last modified May 1, 13, accessed May 15, 13, http://www.bea.gov/national/xls/gdplev.xls. 1948 Notice that real GDP trends upward over time but experiences ups and downs in the short run. These short-run fluctuations in real GDP are often referred to as True or False: Small ups and downs in real GDP follow a consistent, predictable pattern. O True 000 False Which of the following probably occurred as the U.S. economy experienced increasing real GDP in 1950? Check all that apply. ? Home sales declined. Consumer spending increased. The unemployment rate…