Q: If nominal GDP in 2021 is $$6800 and real GDP in 2021 (using 2020 as the base year) is 4900$$, what is the GDP deflator for 2021?

$$\frac{6800}{4900} \times 100 = 138.78$$

Question 1

Suppose Country A can produce either 1000 widgets or 1000 gadgets per day, and Country B can produce either 200 widgets or 600 gadgets per day. What is the opportunity cost for Country B of producing one widget?

Accepted Answer

$$3$$ gadgets

Question 2

Given the production possibilities of Country A and Country B, who has the comparative advantage in widget production?

Accepted Answer

Country A, because it gives up fewer gadgets per widget

Question 3

If the price of a commodity increases, all other things unchanged, what happens to the quantity demanded?

Accepted Answer

It decreases

Question 4

Which of the following best describes the law of increasing opportunity cost?

Accepted Answer

As output of one good increases, the opportunity cost of additional units increases

Question 5

Suppose the cost of a market basket is $$200 in 2020 and 230 in 2021. $$What is the price index for 2021 using 2020 as the base year?

Accepted Answer

$$115$$

Question 6

Which of the following is included in the calculation of GDP as gross private investment?

Accepted Answer

The purchase of lumber by a construction company for inventory

Question 7

If nominal GDP in 2021 is $$6800 and real GDP in 2021 (using 2020 as the base year) is 4900$$, what is the GDP deflator for 2021?

Accepted Answer

$$\frac{6800}{4900} 	imes 100 = 138.78$$

Question 8

Which of the following would NOT cause the supply curve for a good to shift?

Accepted Answer

A change in the price of the good

Question 9

If the market price of soybeans is set at $4 per bushel, and the quantity demanded is 34,000 while the quantity supplied is 4,000, what is the likely market outcome?

Accepted Answer

A shortage

Question 10

Which of the following best defines opportunity cost?

Accepted Answer

The value of the best alternative forgone in making any choice

Question 11

If the price of cotton rises, what is the most likely effect in the market for cotton shirts?

Accepted Answer

The equilibrium price rises and the equilibrium quantity falls

Question 12

Which of the following is an example of human capital?

Accepted Answer

The set of acquired skills and abilities that workers bring to the production of goods and services

Question 13

Suppose the GDP deflator in 2020 is $$100$$ and in 2022 is $$173.47. By $$what percentage did the price level change from 2020 to 2022?

Accepted Answer

$$73.47\%$$

Question 14

Which of the following best describes the difference between a nominal value and a real value?

Accepted Answer

A nominal value is measured in current market prices while a real value is measured in base year prices

Question 15

Which of the following is an example of an intermediate good?

Accepted Answer

The purchase of lumber by a construction company

Question 16

A number of semi-skilled workers in an industry find themselves out of work when improvements in technology render their jobs obsolete. What type of unemployment is this?

Accepted Answer

Structural

Question 17

If the cost of a market basket in 2020 is $$200$$ and in 2021 is $$230$$, what is the percentage change in the price level?

Accepted Answer

$$15\%$$

Question 18

Which of the following is counted in U.S. GDP?

Accepted Answer

The output of a German-owned factory located in New York

Question 19

If the quantity of housing supplied in a community is less than the quantity of houses demanded, what can be said about the existing price?

Accepted Answer

It is below the market equilibrium price

Question 20

Which of the following best describes the components of GDP?

Accepted Answer

Personal consumption, private investment, government purchases, and net exports

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