Exam (elaborations)
Macro hammock final (exam 2_ chapters 7-9, 13, & 16) (1)
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- SAIT ACP Pharmacology
Macro hammock final (exam 2_ chapters 7-9, 13, & 16) (1)
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Macro hammock final (exam 2: chapters 7-9, 13, &16)
Stock vs. Flow - ANS-Stock- quantity measured at a point in time (today)
Flow- total amount of money as it changes overtime (year)`
real per capita GDP - ANS-Real GDP divided by Population. This is the "average" output of the
economy per person measured in a base year prices. This ratio is often used as a measure of
standard of living in comparisons over time of one country, or between different countries when
measured in the same currency.
Which of the following is the best choice for measuring improvements the average person's
standard of living?
a. Nominal GDP
b. Nominal GDP per capita
c. Real GDP
d. real gdp per capita - ANS-D. real GDP per capita
Which of the following most clearly suggests an improvement in a country's standard of living? -
ANS-An increase in Real Per Capita GDP.
Nominal GDP - ANS-the value of final goods and services produced in a year
includes change in both price and growth
Gross domestic product - ANS-is the sum of the total spending on all final-user goods and
services produced domestically during a period.
Real GDP - ANS-GDP adjusted for inflation; includes change in growth
your car is in the shop, and you need to go to the store. You consider paying $30 for an Uber
driver to take you, but a friend offers to take you for free instead, and you take her up on her
offer. The effect of this on GDP is... - ANS-zero, because the free ride is nonmarket production.
Assume that between 1999 and 2009 nominal GDP increased from $7 trillion to $12 trillion and
that the GDP deflator rose from 100 to 150. Which of the following expresses GDP for 2009 in
terms of 1999 prices? - ANS-$8.0 trillion
(new nomial gdp/ new gdp deflator) * old gdp deflator
If you wanted to compare the quantity of output of a country across time periods, which of the
following would you use?
a. consumer price index
, b. nominal gdp
c. gdp deflator
d. real gdp - ANS-real gdp
GDP deflator formula - ANS-Nominal GDP/Real GDP x 100
Real GDP in 2010, using 2009 dollars, was $15 trillion. Nominal GDP in 2010 was $14.5 trillion.
From this you can conclude that... - ANS-GDP Deflator in 2010 was 96.7.
inflation - ANS-a general increase in prices and fall in the purchasing value of money.
Deflation - ANS-a decrease in the general level of prices
Disinflation - ANS-the process of bringing the inflation rate down
CPI (Consumer Price Index) - ANS-a measure of the overall cost of the goods and services
bought by a typical consumer
CPI formula - ANS-(current prices/old prices)*100
Leisure Issue with GDP - ANS-GDP is strictly a Quantitative Measure, not a Qualitative one. It
doesn't factor in the fact that some of the money calculated in the total is on leisure activities,
especially in states such as Florida, where leisure travel is a large part of the GDP.
final goods - ANS-goods and services that have been purchased for final use and not for resale
or further processing or manufacturing
EX. "pizza oven" "subway sandwich"
If U.S. GDP is $18 trillion, Investment spending is $2.5 trillion, Government spending is $4.5
trillion, and Net Exports is -$0.5 trillion (note that's negative half a trillion dollars), then
Consumption spending must be... - ANS-11.5 trillion
18= C+2.5+4.5+(-.5)
solve for C
GDP formula - ANS-Y = C + I + G + NX
C= sum of consumer spending
I= sum of total investments
G= sum of government spending
NX= sum of nations total exports
intermediate goods - ANS-goods used in the production of final goods
EX. toppings to a pizza "cheese, sauce, dough.."
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