1) If Real GDP= $200 billion and the price index= 200, Nominal GDP is$4 billionb. $400 billion$200 billiond. $2 billione. Impossible to determine since the base year is not given.а.с.2) If your nominal income rises 4 percent and your real income falls 1 percent, by howmuch did the price level change?5% decreaseb. 4 % increase3% increaseа.с.d. 3% decrease5% increaseе.3) An increase in the CPI from 200 to 225 would indicate an annual rate of measuredinflation of1.3%b.12.5%25%а.с.d. 200%225%е.

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If Real 200 billion and the price index= 200, Nominal GDP is a. $4 billion b. $400 billion c. $200 billion d. $2 billion e. Impossible to determine since the base vear is not given,

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

1) If Real GDP= $200 billion and the price index= 200, Nominal GDP is
$4 billion
b. $400 billion
$200 billion
d. $2 billion
e. Impossible to determine since the base year is not given.
а.
с.
2) If your nominal income rises 4 percent and your real income falls 1 percent, by how
much did the price level change?
5% decrease
b. 4 % increase
3% increase
а.
с.
d. 3% decrease
5% increase
е.
3) An increase in the CPI from 200 to 225 would indicate an annual rate of measured
inflation of
1.3%
b.
12.5%
25%
а.
с.
d. 200%
225%
е.

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