Title: Contrast and calculate nominal and real GDP
Course: TEST Course

Q: Which of the following represents a real measurement?
- Alex receives his monthly paycheck of $3,000.
- Alex used to earn $2,500 per month 4 years ago.
- Alex spends a third of his income on rent.
A: Alex spends a third of his income on rent.

Q: Real measurements are
- expressed in current dollars.
- expressed using today’s currency.
- expressed in constant dollars.
A: expressed in constant dollars.

Q: To measure a real increase in wages,
- the changes would have to be averaged.
- the increase would have to be compared to the growth in GDP.
- the wages would have to be adjusted for inflation overtime.
A: the wages would have to be adjusted for inflation overtime.

Q: Real measurements are
- fixed through time.
- increasing with prices.
- adjusted for inflation.
A: adjusted for inflation.

Q: Bob is measuring the GDP in 2018 by using the quantity of each final good and service produced in 2018, multiplied by the price at which the goods and services were sold in 2018. What type of calculation is Bob creating?
- The GDP using real values.
- The GDP using both nominal and real values.
- The GDP using nominal values.
A: The GDP using nominal values.

Q: Alejandra is calculating the nondurable goods value for 2017. She is calculating the value by using the quantity of each final nondurable good produced in 2017, multiplied by the price at which the nondurable goods were sold in 2017. What type of calculation is Alejandra creating?
- The nondurable goods real values.
- The nondurable goods nominal and real values.
- The nondurable goods nominal values.
A: The nondurable goods nominal values.

Q: Janice has calculated the GDP for 2018 by using the total final goods times the 2018 prices of total goods. If Janice wishes to create a real value GDP value for 2018, what must she do?
- Janice must multiply the total value by the projected GDP for 2019.
- Janice must divide the total value of consumer goods by the exported goods values.
- Janice must adjust the total value 2018 GDP for inflation.
A: Janice must adjust the total value 2018 GDP for inflation.

Q: Matias has collected a report for last year’s price of consumer goods and his goal is to have a more accurate cost comparison of what utility costs are today as compared with past utility costs. He has a good set of nominal utility cost values from the report. What is the next step for Matias to take to attain his goal of a more accurate utility cost comparison?
- Matias must multiply the total value of the utility costs from the previous years with this year.
- Matias must divide the total value of the utility costs this year by last years total value.
- Matias must adjust the utility cost values for inflation.
A: Matias must adjust the utility cost values for inflation.

Q: If inflation occurs in a given year,
- the change in the real measurement (GDP) would be greater than the change in the nominal one.
- the change in the real measurement (GDP) would be equal to the change in the nominal one.
- the change in the real measurement (GDP) would be smaller than the change in the nominal one.
A: the change in the real measurement (GDP) would be smaller than the change in the nominal one.

Q: If productivity increases from one year to the next,
- only nominal GDP would increase.
- only real GDP would increase.
- nominal and real gross domestic product would increase.
A: nominal and real gross domestic product would increase.

Q: Which of the following best defines real GDP?
- Real GDP is defined as the total dollar value of final goods and services produced within a country in one year before adjustment for inflation.
- Real GDP is defined as the current total dollar value of final goods and services produced within a country.
- Real GDP is defined as the total dollar value of final goods and services produced within a country in one year after adjustment for inflation.
A: Real GDP is defined as the total dollar value of final goods and services produced within a country in one year after adjustment for inflation.

Q: You have just read an explanation of the figures you studying as the total dollar value of final goods and services produced within a country in one year after adjustment for inflation. What is this statement describing?
- The definition of nominal GNP.
- The definition of nominal GDP.
- The definition of real GDP.
A: The definition of real GDP.

Q: The difference between nominal GDP and real GDP is:
- nominal GDP measures actual aggregate production.
- real GDP excludes imports and exports.
- real GDP includes the effects of inflation.
A: real GDP includes the effects of inflation.

Q: The distinction between real GDP and nominal GDP is important to determine which of the following?
- The growth in the government sector.
- The change in real GDP per person.
- The change in real output produced.
A: The change in real output produced.

Q: The following table shows the production within a very small country’s economy in two consecutive years. What was the real GDP of 2017?

Year | Item | Quantity Produced | Price Per Unit
2017 | Oranges | 1000 pounds | $1.00
2017 | Haircuts | 2000 haircuts | $5.00
2018 | Oranges | 1500 pounds | $1.50
2018 | Haircuts | 3000 haircuts | $7.50
- $12,500
- $16,500
- $11,000
A: $11,000

Q: The following table shows the production of a country’s economy in two consecutive years. Using 2017 as the base year, what is the real GDP for 2018?

Year | Item | Quantity Produced | Price Per Unit
2017 | Oranges | 1000 pounds | $1.00
2017 | Haircuts | 2000 haircuts | $5.00
2018 | Oranges | 1500 pounds | $1.50
2018 | Haircuts | 3000 haircuts | $7.50
- $15,000
- $23,250
- $16,500
A: $16,500

Q: If Nominal GDP = $4.5 trillion and the GDP deflator is 150, then real GDP is equal to
- $4.3 trillion.
- $6 trillion.
- $3 trillion.
A: $3 trillion.

Q: If Nominal GDP = $2.5 trillion and the GDP deflator is 125, then real GDP is equal to
- $3 trillion.
- $1.5 trillion.
- $2 trillion.
A: $2 trillion.

Q: Suppose the European Union has a real GDP of 12.2 trillion Euros, and their GDP deflator is 125. What is the European Union’s nominal GDP?
- 9.76 trillion Euros
- 137.5 trillion Euros
- 15.25 trillion Euros
A: 15.25 trillion Euros

Q: Suppose the European Union has a Nominal GDP of 20 trillion Euros, and their GDP deflator is 125. What is the European Union’s Real GDP?
- 25 trillion Euros
- 0.16 trillion Euros
- 16 trillion Euros
A: 16 trillion Euros

Q: If Nominal GDP is $17,000 billion and the GDP deflator is 75, then Real GDP is ________.
- $12.75 billion
- $16.50 billion
- $22.67 billion
A: $22.67 billion

Q: If Nominal GDP is $16,000 billion and the GDP deflator is 50, then Real GDP is ________.
- $25,000 billion
- $8,000 billion
- $32,000 billion
A: $32,000 billion

Q: If Nominal GDP is $12,000 billion and the GDP deflator is 80, then Real GDP is ________.
- $21,600 billion
- $9,600 billion
- $15,000 billion
A: $15,000 billion

Q: If Nominal GDP is $22,000 billion and the GDP deflator is 110, then Real GDP is ________.
- $24,200 billion
- $11,000 billion
- $20,000 billion
A: $20,000 billion

Q: Assume the economy of country C produces hotdogs and buns in the following quantities and prices in 2016 and 2017. Assume also that 2016 is the base year and the real GDP will be calculated using 2016 prices. What is the real GDP 2017?

 | Hot Dogs |  | Buns |
 | Quantity | Price | Quantity | Price
Year 2016 (base year) | 6 million | $2 | 4 million | $1
Year 2017 | 8 million | $3 | 6 million | $2
- $36 million.
- $16 million.
- $22 million.
A: $22 million.

Q: Assume the economy of country C produces hotdogs and buns in the following quantities and prices in 2016 and 2017. Assume also that 2016 is the base year and the real GDP will be calculated using 2016 prices. What is the real GDP 2017?

 | Hot Dogs |  | Buns |
 | Quantity | Price | Quantity | Price
Year 2016 (base year) | 20 million | $2 | 15 million | $1
Year 2017 | 22 million | $3 | 16 million | $2
- $98 million.
- $90 million.
- $60 million.
A: $60 million.

Q: Assume the economy of country C produces hotdogs and buns in the following quantities and prices in 2016 and 2017. Assume also that 2016 is the base year and the real GDP will be calculated using 2016 prices. What is the real yearly growth (between 2016 and 2017)?

 | Hot Dogs |  | Buns |
 | Quantity | Price | Quantity | Price
Year 2016 (base year) | 6 million | $2 | 4 million | $1
Year 2017 | 8 million | $3 | 6 million | $2
- 125%
- 20%
- 37.5%
A: 37.5%

Q: Assume the economy of country G produces hotdogs and buns in the following quantities and prices in 2017 and 2018. Assume also that 2017 is the base year and the real GDP will be calculated using 2017 prices. What is the real yearly growth (between 2017 and 2018)?

 | Hot Dogs |  | Buns |
 | Quantity | Price | Quantity | Price
Year 2017 (base year) | 5 million | $3 | 2 million | $2
Year 2018 | 7 million | $5 | 6 million | $4
- 32.2%
- 211%
- 73.7%
A: 73.7%

Q: With a Real GDP of $15 trillion in 2015 and of $18 trillion in 2016, the real growth would be ________.
- 2%
- 16.7%
- 20%
A: 20%

Q: With a Real GDP of $100 billion in 2016 and of $140 billion in 2017, the real growth would be ________.
- 14%
- 71%
- 40%
A: 40%

Q: Given the following information, what would the real growth in 2015 be?

 | Nominal GDP | GBP Deflator
2014 | $120 billion | 110
2015 | 145 billion | 126
- 38.6%
- 21%
- 5.5%
A: 5.5%

Q: Given the following information, what would the real growth in 2015 be?

 | Nominal GDP | GBP Deflator
2014 | $500 billion | 200
2015 | 575 billion | 220
- 4.2%
- 11%
- 5%
A: 5%

Q: The fictional small country of Dansbert has had a robust GDP the last few years. Dansbert produces just two products: TVs and Computers. The following chart shows product quantities and prices from 2016 to 2018. With 2016 as the base year calculate the real GDP using 2018 prices. What is the real yearly growth of 2017 & 2018?

 | TVs |  | Computers |
 | Quantity | Price/unit | Quantity | Price/unit
Year 2016 (base year) | 1 million | $20 | 2 million | $40
Year 2017 | 3 million | $40 | 3 million | $65
Year 2018 | 5 million | $70 | 6 million | $80
- 250% for 2017; 100% for 2018
- 215% for 2017; 730% for 2018
- 80% for 2017; 240% for 2018
A: 80% for 2017; 240% for 2018

Q: The fictional small country of Qbert has had a robust GDP the last few years. Dansbert produces just two products; Water Bottles and Bikes. The following chart shows product quantities and prices from 2016 to 2018. With 2016 as the base year calculate the real GDP using 2018 prices. What is the real yearly growth of 2017 & 2018?

 | Water Bottles |  | Bikes |
 | Quantity | Price/unit | Quantity | Price/unit
Year 2016 (base year) | 1 million | $3 | 2 million | $10
Year 2017 | 2.5 million | $4 | 2.5 million | $12
Year 2018 | 3 million | $5 | 2.75 million | $17
- 73.9% for 2017; 168.5% for 2018
- 23.1% for 2017; 69.2% for 2018
- 41.3% for 2017; 58.7% for 2018
A: 41.3% for 2017; 58.7% for 2018