PS8 - Lecture notes 1-2 PDF

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Economics Principle...

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Monday, 22 March 2021, 7:29 AM

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Monday, 22 March 2021, 8:58 AM 1 hour 29 mins 37.0/40.0

Grade 9.3 out of 10.0 (93%) Question 1 Correct Mark 1.0 out of 1.0

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Question text 1. Which of the following is not included in GDP? Select one: a. a.unpaid cleaning and maintenance of houses

b. b.services such as those provided by lawyers and hair stylists c. c.the estimated rental value of owner-occupied housing d. d.production of foreign citizens living in the United States Feedback correct The correct answer is: a.unpaid cleaning and maintenance of houses Question 2 Correct Mark 1.0 out of 1.0

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Question text 2. Which of the following transactions adds to U.S. GDP for 2006? Select one: a. a.In 2006, Ashley sells a car that she bought in 2002 to William for $5,000. b. b.An American management consultant works in Mexico during the summer of 2006 and earns the equivalent of $30,000 during that time. c. c.When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and Jennifer got married in 2006 and they bought a house that, according to reliable estimates, could be rented for $1,600 per month.

d. d.None of the above transactions adds to GDP for 2006. Feedback correct The correct answer is: c.When John and Jennifer were both single, they lived in separate apartments and each paid $750 in rent. John and Jennifer got married in 2006 and they bought a house that, according to reliable estimates, could be rented for $1,600 per month. Question 3 Correct Mark 1.0 out of 1.0

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Question text 3. Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves. For example, busy people with high incomes, rather than cleaning their own houses, hire people to clean their houses. By itself, this change has Select one: a. a.caused GDP to fall. b. b.not caused any change in GDP. c. c.caused GDP to rise.

d. d.probably changed GDP, but in an uncertain direction; the direction of the change depends on the difference in the quality of the cleaning that has resulted. Feedback correct The correct answer is: c.caused GDP to rise. Question 4 Correct Mark 1.0 out of 1.0

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Question text 4. A steel company sells some steel to a bicycle company for $100. The bicycle company uses the steel to produce a bicycle, which it sells for $200. Taken together, these two transactions contribute Select one: a. a.$100 to GDP. b. b.$200 to GDP.

c. c.between $200 and $300 to GDP, depending on the profit earned by the bicycle company when it sold the bicycle. d. d.$300 to GDP. Feedback correct The correct answer is: b.$200 to GDP. Question 5 Correct Mark 1.0 out of 1.0

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Question text 5. Grapes are Select one:

a. a.always counted as an intermediate good. b. b.counted as an intermediate good only if they are used to produce another good such as wine.

c. c.counted as an intermediate good only if they are consumed. d. d.counted as an intermediate good, whether they are used to produce another good or consumed. Feedback correct The correct answer is: b.counted as an intermediate good only if they are used to produce another good such as wine. Question 6 Incorrect Mark 0.0 out of 1.0

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Question text 6. The local Chevrolet dealership has an increase in inventory of 25 cars in 2006. In 2007 it sells all 25 cars. Which of the following statements is correct? Select one: a. a.The full value of the increased inventory will be counted as part of GDP in 2006, and the value of the cars sold in 2007 will not cause 2007 GDP to increase. b. b.The value of the increased inventory will not affect 2006 GDP; instead, the full value of the inventory will be counted as part of 2007 GDP. c. c.The value of the increased inventory will be counted as part of 2006 GDP and the value of the cars sold in 2007 will increase 2007 GDP.

d. d.One-half of the value of the increased inventory will be counted as part of 2006 GDP and the other one-half of the value will be counted as part of 2007 GDP. Feedback incorrect The correct answer is: a.The full value of the increased inventory will be counted as part of GDP in 2006, and the value of the cars sold in 2007 will not cause 2007 GDP to increase. Question 7 Correct Mark 1.0 out of 1.0

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Question text 7. Until recently, George lived in a home that was newly constructed in 2005. In 2005, he paid $200,000 for the brand new house. He sold the house in 2006 for $225,0000. Which of the following statements is correct regarding the sale of the house? Select one: a. a.The 2006 sale increased 2006 GDP by $225,000 and had no effect on 2005 GDP. b. b.The 2006 sale increased 2006 GDP by $25,000 and had no effect on 2005 GDP. c. c.The 2006 sale increased 2006 GDP by $225,000; furthermore, the 2006 sale caused 2005 GDP to be revised upward by $25,000. d. d.The 2006 sale affected neither 2005 GDP nor 2006 GDP.

Feedback correct The correct answer is: d.The 2006 sale affected neither 2005 GDP nor 2006 GDP. Question 8 Correct Mark 1.0 out of 1.0

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Question text 8. An American company operates a fast food restaurant in Romania. Which of the following statements is accurate? Select one: a. a.The value of the goods and services produced by the restaurant is included in both Romanian GDP and U.S. GDP. b. b.One-half of the value of the goods and services produced by the restaurant is included in Romanian GDP, and the other one-half of the value is included in U.S. GDP. c. c.The value of the goods and services produced by the restaurant is included in Romanian GDP, but not in U.S. GDP.

d. d.The value of the goods and services produced by the restaurant is included in U.S. GDP, but not in Romanian GDP. Feedback correct The correct answer is: c.The value of the goods and services produced by the restaurant is included in Romanian GDP, but not in U.S. GDP. Question 9 Correct Mark 1.0 out of 1.0

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Question text 9.U.S. GDP and U.S. GNP are related as follows: Select one: a. a.GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad.

b. b.GNP = GDP + Income earned by foreigners in the U.S. - Income earned by U.S. citizens abroad. c. c.GNP = GDP + Value of exported goods - Value of imported goods. d. d.GNP = GDP - Value of exported goods + Value of imported goods. Feedback correct The correct answer is: a.GNP = GDP - Income earned by foreigners in the U.S. + Income earned by U.S. citizens abroad. Question 10 Correct Mark 1.0 out of 1.0

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Question text

10. In a certain small country, the unit of currency is the huck. That country's government recently announced that "GDP amounted to 400 million hucks in the quarter that just ended." Assuming this country has adopted American GDP accounting conventions, this statement means that GDP, Select one: a. a.without seasonal adjustment, amounted to 100 million hucks in the quarter that just ended. b. b.with seasonal adjustment, amounted to 100 million hucks in the quarter that just ended.

c. c.without seasonal adjustment, amounted to 400 million hucks in the quarter that just ended. d. d.with seasonal adjustment, amounted to 400 million hucks in the quarter that just ended. Feedback correct The correct answer is: b.with seasonal adjustment, amounted to 100 million hucks in the quarter that just ended. Question 11 Correct Mark 1.0 out of 1.0

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Question text 11. If you buy a burger and fries at your favorite fast food restaurant, Select one: a. a.neither GDP nor consumption will be affected because you would have eaten at home had you not bought the meal at the restaurant. b. b.GDP will be higher, but consumption spending will be unchanged. c. c.GDP will be unchanged, but consumption spending will be higher. d. d.both GDP and consumption spending will be higher.

Feedback correct The correct answer is: d.both GDP and consumption spending will be higher. Question 12 Incorrect Mark 0.0 out of 1.0

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Question text 12. For the purpose of calculating GDP, investment is spending on Select one: a. a.stocks, bonds, and other financial assets. b. b.real estate and financial assets. c. c.new capital equipment, inventories, and structures, including new housing. d. d.capital equipment, inventories, and structures, excluding household purchases of new housing.

Feedback incorrect The correct answer is: c.new capital equipment, inventories, and structures, including new housing. Question 13 Correct Mark 1.0 out of 1.0

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Question text 13. The U.S. Air Force pays a Turkish citizen $30,000 to work on a U.S. base in Turkey. As a result, Select one: a. a.U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP and GNP are unaffected.

b. b.U.S. government purchases increase by $30,000; U.S. GNP increases by $30,000; and U.S. GDP and U.S. net exports are unaffected. c. c.U.S. government purchases; and U.S. net exports, GDP, and GNP are unaffected. d. d.U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; U.S. GNP increases by $30,000; and U.S. GDP is unaffected. Feedback

correct The correct answer is: a.U.S. government purchases increase by $30,000; U.S. net exports decrease by $30,000; and U.S. GDP and GNP are unaffected. Question 14 Correct Mark 1.0 out of 1.0

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Question text 14. If a U.S. citizen buys a television made in Korea by a Korean firm, Select one: a. a.U.S. net exports decrease and U.S. GDP decreases. b. b.U.S. net exports are unaffected and U.S. GDP decreases. c. c.U.S. net exports are unaffected and U.S. GDP is unaffected. d. d.U.S. net exports decrease and U.S. GDP is unaffected.

Feedback correct The correct answer is: d.U.S. net exports decrease and U.S. GDP is unaffected. Question 15 Correct Mark 1.0 out of 1.0

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Question text

Table 23-3.

15. Refer to Table 23-3. Nominal GDP for 2007 is Select one: a. a.$900. b. b.$1,100.

c. c.$1,250. d. d.$1,350. Feedback correct The correct answer is: b.$1,100. Question 16 Correct Mark 1.0 out of 1.0

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Question text 16. Refer to Table 23-3. Nominal GDP is Select one: a. a.$680 for 2006, $880 for 2007, and $1,200 for 2008. b. b.$760 for 2006, $880 for 2007, and $1,000 for 2008. c. c.$760 for 2006, $1,100 for 2007, and $1,600 for 2008.

d. d.$960 for 2006, $1,280 for 2007, and $1,300 for 2008. Feedback

correct The correct answer is: c.$760 for 2006, $1,100 for 2007, and $1,600 for 2008. Question 17 Correct Mark 1.0 out of 1.0

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Question text 17. Refer to Table 23-3. Using 2006 as the base year, for 2007, Select one: a. a.real GDP is $880 and the GDP deflator is 80. b. b.real GDP is $880 and the GDP deflator is 125.

c. c.real GDP is $950 and the GDP deflator is 95. d. d.real GDP is $950 and the GDP deflator is 116. Feedback correct The correct answer is: b.real GDP is $880 and the GDP deflator is 125. Question 18 Correct Mark 1.0 out of 1.0

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Question text 18. Refer to Table 23-3. Using 2007 as the base year, for 2006, Select one: a. a.real GDP is $760 and the GDP deflator is 100. b. b.real GDP is $760 and the GDP deflator is 125. c. c.real GDP is $880 and the GDP deflator is 80. d. d.real GDP is $950 and the GDP deflator is 80.

Feedback correct The correct answer is: d.real GDP is $950 and the GDP deflator is 80. Question 19 Correct Mark 1.0 out of 1.0

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Question text 19. Refer to Table 23-3. Using the GDP deflator to measure the average level of prices and using 2006 as the base year, the economy's inflation rate is Select one: a. a.20 percent for 2007 and 12.5 percent for 2008. b. b.20 percent for 2007 and 30 percent for 2008. c. c.25 percent for 2007 and 28 percent for 2008.

d. d.44.7 percent for 2007 and 45.5 percent for 2008. Feedback correct The correct answer is: c.25 percent for 2007 and 28 percent for 2008. Question 20 Correct Mark 1.0 out of 1.0

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Question text 20. The consumer price index is used to Select one: a. a.track changes in the level of wholesale prices in the economy. b. b.monitor changes in the cost of living.

c. c.monitor changes in the level of real GDP. d. d.track changes in the stock market. Feedback correct The correct answer is: b.monitor changes in the cost of living. Question 21 Correct Mark 1.0 out of 1.0

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Question text 21. The term inflation is used to describe a situation in which Select one: a. a.the overall level of prices in the economy is increasing.

b. b.incomes in the economy are increasing. c. c.stock-market prices are rising. d. d.the economy is growing rapidly. Feedback correct The correct answer is: a.the overall level of prices in the economy is increasing. Question 22 Correct Mark 1.0 out of 1.0

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Question text Table 24-4 The table below pertains to an economy with only two goods -- books and calculators. The fixed basket consists of 5 books and 10 calculators.

22. Refer to Table 24-4. Using 2006 as the base year, the consumer price index is Select one: a. a.100 in 2006, 135 in 2007, and 155 in 2008.

b. b.100 in 2006, 270 in 2007, and 310 in 2008. c. c.200 in 2006, 270 in 2007, and 310 in 2008. d. d.200 in 2006, 540 in 2007, and 620 in 2008. Feedback correct The correct answer is: a.100 in 2006, 135 in 2007, and 155 in 2008. Question 23 Correct Mark 1.0 out of 1.0

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Question text 23. Refer to Table 24-4. Using 2007 as the base year, the consumer price index is Select one: a. a.78.22 in 2006, 100 in 2007, and 121.10 in 2008. b. b.74.07 in 2006, 100 in 2007, and 114.81 in 2008.

c. c.100 in 2006, 135 in 2007, and 155 in 2008. d. d.200 in 2006, 270 in 2007, and 310 in 2008. Feedback

correct The correct answer is: b.74.07 in 2006, 100 in 2007, and 114.81 in 2008. Question 24 Correct Mark 1.0 out of 1.0

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Question text 24. Refer to Table 24-4. Using 2008 as the base year, the consumer price index is Select one: a. a.52.66 in 2006, 84.25 in 2007, and 106.5 in 2008. b. b.64.52 in 2006, 87.10 in 2007, and 100 in 2008.

c. c.52.66 in 2006, 90.89 in 2007, and 100 in 2008. d. d.100 in 2006, 135 in 2007, and 155 in 2008. Feedback correct The correct answer is: b.64.52 in 2006, 87.10 in 2007, and 100 in 2008. Question 25 Correct Mark 1.0 out of 1.0

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Question text 25. Refer to Table 24-4. Using 2006 as the base year, the inflation rate is Select one: a. a.13.3 percent for 2007 and 14.8 percent for 2008. b. b.35 percent for 2007 and 14.8 percent for 2008.

c. c.35 percent for 2007 and 55 percent for 2008. d. d.135 percent for 2007 and 155 percent for 2008.

Feedback correct The correct answer is: b.35 percent for 2007 and 14.8 percent for 2008. Question 26 Correct Mark 1.0 out of 1.0

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Question text 26. In an imaginary economy, consumers buy only shirts and pants. The fixed basket consists of 6 shirts and 4 pairs of pants. A shirt cost $20 in 2006 and $25 in 2007. A pair of pants cost $30 in 2006 and $40 in 2007. Using 2006 as the base year, which of the following statements is correct? Select one: a. a.For the typical consumer, the number of dollars spent on shirts is equal to the number of dollars spent on pants in each of the two years. b. b.The consumer price index is 134 in 2007. c. c.The rate of inflation is 29.17% in 2007.

d. d.All of the above are correct. Feedback correct The correct answer is: c.The rate of inflation is 29.17% in 2007. Question 27 Correct Mark 1.0 out of 1.0

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Question text 27. In an imaginary economy, consumers buy only sandwiches and magazines. The fixed basket consists of 20 sandwiches and 30 magazines. In 2006, a sandwich cost $4 and a magazine cost $2. In 2007, a sandwich cost $5. The base year is 2006. If the consumer price index in 2007 was 125, then how much did a magazine cost in 2007? Select one:

a. a.$2.50

b. b.$2.80 c. c.$3.20 d. d.$3.45 Feedback correct The correct answer is: a.$2.50 Question 28 Correct Mark 1.0 out of 1.0

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Question text 28. Suppose the price index in 2004 was 100; the price index in 2005 was 118; and the inflation rate between 2005 and 2006 was lower than it was between 2004 and 2005. This means that Select one: a. a.the price index in 2006 was lower than 118.00. b. b.the price index in 2006 was lower than 136.00. c. c.the price index in 2006 was lower than 139.24.

d. d.the inflation rate between 2005 and 2006 was lower than 1.18 percent. Feedback correct The correct answer is: c.the price index in 2006 was lower than 139.24. Question 29 Correct Mark 1.0 out of 1.0

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Question text

29. In the basket of goods that is used to compute the consumer price index, the three most important categories of consumer spending are Select one: a. a.housing, transportation, and entertainment. b. b.housing, transportation, and food & beverages.

c. c.housing, medical care, and food & beverages. d. d.education, medical care, and food & beverages. Feedback correct The correct answer is: b.housing, transportation, and food & beverages. Question 30 Correct Mark 1.0 out of 1.0

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Question text 30. Suppose the price of gasoline increases rapidly, and that consumers respond by buying a smaller quantity of gasoline. The consumer price index Select one: a. a.reflects this price increase accurately. b. b.understates the price increase due to the so-called income bias. c. c.overstates the price increase due to the so-called income bias. d. d.overstates the price increase due to the so-called substitution bias.

Feedback correct The correct answer is: d.overstates the price increase due to the so-called substitution bias. Question 31 Correct Mark 1.0 out of 1.0

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Question text 31. Which of these events would cause the consumer price index to overstate the increase in the cost of living? Select one: a. a.Carmakers benefit from a new technology that allows them to sell higher-quality cars to consumers with no increase in price. b. b.Energy prices decrease, and consumers respond by buying more gas and electricity. c. c.A new good is introduced that renders cellular telephones inferior and obsolete. d. d.All of the above are correct.

Feedback correct The correct answer is: d.All of the above are correct. Question 32 Correct Mark 1.0 out of 1.0

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Question text 32. When the quality of a good improves, the purchasing power of the dollar Select one: a. a.increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for.

b. b.increases, so the CPI understates the change in the cost of living if the quality change is not accounted for. c. c.decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for. d. d.decreases, so the CPI understates the change in the cost of living if the quality change is not accounted for.

Feedback correct The correct answer is: a.increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for. Question 33...