Chapter 3 Quiz Essay

2490 Words Nov 6th, 2012 10 Pages
1 of 30
Which of the following is a flow variable? A. the value of the house in which you live B. the balance in your savings account C. your monthly consumption of hamburgers D. the number of hamburgers in your refrigerator at the beginning of the month

1 out of 1
Correct. The answer is C. As explained in Section 2-1, a flow is a quantity measured per unit time and a stock is a quantity measured at a given point in time.

2 of 30
Which of the following is not a stock variable? A. government debt B. the labor force C. the amount of money held by the public D. inventory investment

0 out of 1
Incorrect. The correct answer is D. Inventory investment is a quantity measured per unit time, so it is a flow variable.
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B. nominal GDP divided by the GDP deflator. C. nominal GDP multiplied by the GDP deflator. D. GDP minus depreciation.

0 out of 1
Incorrect. The correct answer is B. As explained in Section 2-1, real GDP equals nominal GDP divided by the GDP deflator.

12 of 30
If production remains the same and all prices double relative to the base year, then the GDP deflator is A. 1/4. B. 1/2. C. 1. D. 2.

1 out of 1
Correct. The answer is D. As explained in Section 2-1, the GDP deflator equals nominal GDP divided by real GDP. If prices double, nominal GDP will double and real GDP will be unchanged. Therefore, the GDP deflator will equal 2.

13 of 30
Consider the following table: APPLES ORANGES Year Production/Price Production/Price 1995 20/ $0.50 10/$1.00 2000 10/ $1.00 10/$0.50 If 1995 is the base year, what is the GDP deflator for 2000? A. 0 B. between 0 and 1 C. 1 D. greater than 1

Question not answered

14 of 30
To obtain the net national product (NNP), start with the gross national product (GNP) and subtract A. depreciation. B. depreciation and indirect business taxes. C. depreciation, indirect business taxes, and corporate profits. D. depreciation, indirect business taxes, corporate profits, and social insurance contributions.

0 out of 1
Incorrect. The correct answer is A. For an explanation of NNP, see Section 2-1.

15 of 30
To obtain national income, start with GNP and subtract A. depreciation. B.

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