EBK ESSENTIALS OF ECONOMICS
7th Edition
ISBN: 8220102452107
Author: Mankiw
Publisher: CENGAGE L
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Chapter 15, Problem 6QCMC
To determine
The impact of increase in quantity produced and
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Real GDP is GDP adjusted for changes in:
a. production.
b. average wages.
c. unemployment.
d. inflation.
e. interest.
If all quantities produced rise by 5 percent and allprices fall by 5 percent, which of the following bestdescribes what occurs?a. Real GDP rises by 5 percent, while nominalGDP falls by 5 percent.b. Real GDP rises by 5 percent, while nominalGDP is unchanged.c. Real GDP is unchanged, while nominal GDP risesby 5 percent.d. Real GDP is unchanged, while nominal GDP fallsby 5 percent.
f the GDP deflator in 2009 equals 1.25 and nominal GDP in 2009 equals $18.75 trillion, then the value of real GDP in 2009 equals _____ trillion.
Select one:
A. $12
B. $12.5
C. $15
D. $18.75
E. $15.625
Chapter 15 Solutions
EBK ESSENTIALS OF ECONOMICS
Ch. 15.1 - Prob. 1QQCh. 15.2 - Prob. 2QQCh. 15.3 - Prob. 3QQCh. 15.4 - Prob. 4QQCh. 15.5 - Prob. 5QQCh. 15 - Prob. 1QRCh. 15 - Prob. 2QRCh. 15 - Prob. 3QRCh. 15 - Prob. 4QRCh. 15 - Prob. 5QR
Ch. 15 - Prob. 6QRCh. 15 - Prob. 7QRCh. 15 - Prob. 8QRCh. 15 - Prob. 1QCMCCh. 15 - Prob. 2QCMCCh. 15 - Prob. 3QCMCCh. 15 - Prob. 4QCMCCh. 15 - Prob. 5QCMCCh. 15 - Prob. 6QCMCCh. 15 - Prob. 1PACh. 15 - Prob. 2PACh. 15 - Prob. 3PACh. 15 - Prob. 4PACh. 15 - Prob. 5PACh. 15 - Prob. 6PACh. 15 - Prob. 8PACh. 15 - Prob. 9PACh. 15 - Prob. 10PACh. 15 - Prob. 11PA
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- Read the news clip, then answer the following question. The statement that total sales by businesses were up 0.3 percent means that GDP because OA. Increased by 0.3 percent; GDP is a record of the value of all production B. decreased by 0.3 percent; "total sales by businesses are sales of intermediate goods and services OC. did not change by 0.3 percent, GDP measures production of all final goods and services and "total sales by businesses includes final and intermediate goods and services OD. increased by less than 0.3 percent; we need to subtract retail sales of 1.3 percent from the total sales by businesses to eliminate double counting OE. increased by more than 0.3 percent; "total sales by businesses includes only sales of intermediate goods and services Expansion remains slow The Commerce Department reported that retail sales increased 1.3 percent in Net exports were up 0.8 percent in the first quarter and inventories held by businesses rose by 0.3 percent in June. Total sales by…arrow_forwardAssume the economy experiences an increase in non-market transactions and a decrease in market transactions. Which of the following is true? A. GDP will increase B. The productive activity has increased. C. GDP will decrease D. The market value of services will increase.arrow_forward16. If all quantities produced rise by 5% and all prices fall by 5%, which of the following best describes what occurs? a. Real GDP rises by 5%, while nominal GDP falls by 5% (6. Real GDP rises by 5%, while nominal GDP is unchanged c. Real GDP is unchanged, while nominal GDP rises by 5% d. Real GDP is unchanged, while nominal GDP falls by 5%arrow_forward
- Real GDP is Select one: a. nominal GDP adjusted for depreciation. b. nominal GDP adjusted for transfer payments. c. nominal GDP adjusted for indirect business taxes. d. nominal GDP adjusted for price changes.arrow_forwardConstruction contractor purchased five new trucks at $400 000 each. He sold his one old tractor to other farmers for $100 000. What is the value of GDP? a. $3 000 000 b. $2 500 000 c. $2 000 000 d. $1 000 000arrow_forwarda. If nominal GDP rose, does that mean that production had to increase as well? Why or why not?An increase in nominal GDP means there must have been an increase in inputs. may have been due to an increase in the price level. means production must have increased. means production must have decreased.b. What about if real GDP increased?An increase in real GDP may have been due to an increase in the price level. means production must have increased because the price level is not held constant. means production must have decreased. means production must have increased because the price level is held constant.c. Why is it important to use real GDP when comparing changes over time?Changes in real GDP over time will accurately reflect changes in real production. should not be used. We should use changes in nominal GDP when analyzing changes over time. have a time lag, which helps us accurately predict business cycles. will include changes in the price level, which gives a complete picture.arrow_forward
- 2. True or False? When we measure GDP, it's always better to measure aggregate expenditure rather than aggregate production. A. True B. False 3. What accounts for the difference in real GDP vs. nominal GDP for the same year? A. Month of the year measurement is taken in B. Which government agency reports the number C. What price level is used D. Whether exports exceed imports that year or vice versa 4. Which U.S. federal agency produces GDP data for the U.S.? A. BEA B. CIA C. FBI D. FDA 5. Real GDP rose from $3 trillion to $3.1 trillion in one year. What's the GDP growth rate? A. 0.1% B. 3.2% C. 3.3% D. 10% 6. In our model of production for studying the GDP, what does lower-case y stand for? A. Productivity parameter B. Per capita GDP C. Marginal GDP D. Per capita capitalarrow_forwardPotential GDP refers to a. the level of output that an economy can produce when all resources (land, labor, capital, and entrepreneurial ability) are fully employed. b. the level of output that an economy can produce when all resources (land, labor, capital, and entrepreneurial ability) are not fully employed. c. an abstract conception developed by economists. d. an unreal expectation of the government.arrow_forwardThe value of GDP can be found by adding together... A. wages, consumption, investment, and imports. B. government purchases, consumption, net exports, and investment. C. consumption, government purchases, transfer payments, and net exports. D. wages, investment, government purchases, and depreciation.arrow_forward
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