The next four questions involve the following situation: Consider an economy with only two products: silver and lead. There is no international trade and no govern ment. The following table shows production and prices in 2020 and 2021. Use 2020 a the base year for any relevant calculations. Year Good Price per ounce Production (ounces) $20 $1 2020 Silver 500,000 2020 Lead 1,000,000 2021 Silver $30 200,000 2021 Lead $2 20,000,000 15. What is nominal GDP in 2020? (A) $10,000,000. (B) $11,000,000. (C) $24,000,000. (D) $46,000,000. 16. What is real GDP in 2021? (A) $10,000,000. (B) $11,000,000. (C) $24,000,000. (D) $46,000,000.
The next four questions involve the following situation: Consider an economy with only two products: silver and lead. There is no international trade and no govern ment. The following table shows production and prices in 2020 and 2021. Use 2020 a the base year for any relevant calculations. Year Good Price per ounce Production (ounces) $20 $1 2020 Silver 500,000 2020 Lead 1,000,000 2021 Silver $30 200,000 2021 Lead $2 20,000,000 15. What is nominal GDP in 2020? (A) $10,000,000. (B) $11,000,000. (C) $24,000,000. (D) $46,000,000. 16. What is real GDP in 2021? (A) $10,000,000. (B) $11,000,000. (C) $24,000,000. (D) $46,000,000.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:17. What is the GDP deflator in 2021?
(A) 108.3.
(В) 110.
(С) 192.7.
(D) 521.7.
18. Suppose that you are the head of this economy's central bank, and are tasked with
limiting inflation to less than 10 percent per year. What would you do?
(A) Nothing. Based on your target, inflation is low already.
(B) Start purchasing bonds.
(C) Print money and drop it from helicopters... literally make it rain.
(D) Increase the interest rate in overnight markets.
Transcribed Image Text:The next four questions involve the following situation: Consider an economy
with only two products: silver and lead. There is no international trade and no govern-
ment. The following table shows production and prices in 2020 and 2021. Use 2020 as
the base year for any relevant calculations.
Year Good Price per ounce Production (ounces)
2020 Silver
$20
500,000
2020
Lead
$1
1,000,000
2021 Silver
$30
200,000
2021
Lead
$2
20,000,000
15. What is nominal GDP in 2020?
(A) $10,000,000.
(B) $11,000,000.
(C) $24,000,000.
(D) $46,000,000.
16. What is real GDP in 2021?
(A) $10,000,000.
(B) $11,000,000.
(C) $24,000,000.
(D) $46,000,000.
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