Question

ப. மன பயமா பயானா சாயாபரானன decreasing 16. The main goals of government macroeconomics policy are a. to keep the cost of living relatively low and stable and to dampen the severity of recessions. b. to stimulate the economy so that each period's real GDP is the highest amount possible and to keep the nominal prices firms are paid for their outputs to be as high as possible c to subsidize private insurance for businesses to cover harm from macroeconomic fluctuations and to slow down economic growth d. to provide insurance to cover private losses due to short-run macroeconomic fluctuations and to promote economic growth. 17. Which item would not be included in the American nominal GDP in 2014? A. The current-dollar value of newly-produced cars sold by a car dealer in new car sales by a local dealer in Montpelier. Vermont in 2014 B. The current-dollar value of the new cars produced in Tennessee in 2014 but not sold in 2014. C. The current-dollar value of a San Francisco lawyer's services rendered in 2014. D. The current-dollar value of a repair job done by your cousin on her own car in Phoenix in 2014 21. In 2012, newspapers reported that the annual Consumer Price Index in 2011 was 120.0. From this we can conclude that a typical market basket in 2011 would have cost more than the same market basket purchased in a. 20%; the base year b. 120%; the base year c. 120%: 2010 d. 20%: 2010 22. The table below gives information on the the prices of three common school supplies in 2010 and 2011 and the quantities of each school supply that consumers bought in 2010, the base year., for a country The table has four columns depicting the Good, Prices in 2010 (base year). Quantity Brought (2010). and Prices in 2011. The data in the table are as follows Row 1: Backpack, 40, 1000.50. Row 2: Notebook, 10. 5000, 12. Row 3: Highlighter, 1.2000, 1.25. The prices are in dollars If the quantities of the goods gives the country's market basket, what is the country's Consumer Price Index in 2011? a 81.8 b. 124 c. 122.2 d. 100

Answer 1

Question 16

Government uses macroeconomic policy to eliminate the business cycle fluctuations.

Business cycle fluctuations results in either recessionary conditions or inflationary conditions.

Government utilizes macroeconomic policy to bring inflation under control or within desired range or to eliminate recession and put economy back on growth track.

So,

It can be stated that the main goals of government macroeconomic policy are to keep the cost of living relatively low and stable and to dampen the severity of recession.

Hence, the correct answer is the option (a).

Question 17

GDP includes the value of final goods and services produced in a country during a year.

It does not include sale and purchase of second hand goods.

it does not include production of services for self-consumption but includes the production of goods for self consumption.

It also does not include intermediate goods.

Repair job done by our cousin on her own car is the production of service for her own consumption.

So, it would not be included in the American nominal GDP in 2014.

Hence, the correct answer is the option (D).