PRINCIPLES OF MACROECONOMICS (LL)W/ACC.
7th Edition
ISBN: 9781264088980
Author: Frank
Publisher: MCG
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Chapter 12, Problem 1P
To determine
Identify the duration of expansion in US using the given table.
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A futures market trades contracts on the growth rate for nominal GDP. The contract pays $X to the
buyer, where X is 100 times the growth rate in nominal GDP from last year to this year. For
example, if nominal GDP grows by 1% over last year, the contract pays $100 (1 x 100).
Nominal GDP last year was $28,137 billion. Contracts on the futures markets are currently selling
for $460. What is the market's prediction for nominal GDP this year?
Put your answer in billions. You may round to two decimal places.
Which of the following is a correct statement about the difference between chain-weighted and fixed-weight real GDP growth rates?
a) Chain-weighted growth rates are more accurate if prices are rising slowly. Fixed-weight growth rates are more accurate when prices are rising rapidly.
b) Chain-weighted growth rates depend on the choice of base year. Fixed-weight growth rates do not.
c) Chain-weighted growth rates tend to be larger, the earlier is the base year. This is not the case for fixed-weight growth rates.
d) Fixed-weighted growth rates tend to decline when the base year is updated. Chain-weighted growth rates do not.
When a recession begins and ends is determined by the Business Cycle Dating Committee (chaired by our textbook author Robert Hall) within the National Bureau of Economic Research (NBER). The NBER concluded that the unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this current pandemic-driven episode in the nation as a recession.
True
False
Chapter 12 Solutions
PRINCIPLES OF MACROECONOMICS (LL)W/ACC.
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