Nsu Economic Thinking Quiz Answers

• Question 1

1 out of 1 points

Suppose that a farmer grows wheat and sells it to a baker for $1, the baker makes bread and sells it to a store for $2, and the store sells it to the customer for $3. This transaction increases GDP by

Answer

Selected Answer:

$3.

• Question 2

1 out of 1 points

If production remains the same and all prices double, then real GDP

Answer

Selected Answer:

is constant and nominal GDP doubles.

• Question 3

1 out of 1 points

If the GDP price deflator is 2.0 and nominal GDP is $10,000 billion, then real GDP is

Answer

Selected Answer:

$5,000 billion.

• Question 4

1 out of 1 points

The consumer price index (CPI)

Answer

Selected Answer:

measures the price of a fixed basket of good and services that typical households purchase.

• Question 5

1 out of 1 points

In the national income accounts, all of the following are classified as government purchases except:

Answer

Selected Answer:

payments made to Social Security recipients.

• Question 6

1 out of 1 points

Your grandparents tell you that in 1960 they paid $0.35 for admission to a movie. The price index in 1960 was 30. The price index today is 171. What is the price your grandparents paid in today’s dollars?

Answer

Selected Answer:

$1.99

• Question 7

0 out of 1 points

Which of the following is a type of open-market operation?

Answer

Selected Answer:

The Fed buys foreign currency in the exchange market.

• Question 8

1 out of 1 points

Consider the following table

Year Inflation Rate Nominal Interest Rate

1 5% 10%

2 10% 5%

By how much has the real interest rate changed between year 1 and year 2?

Answer

Selected Answer:...