Question

1) 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

2) Real measurements are

-fixed through time.

-increasing with prices.

-adjusted for inflation.

3) ________ is the value of output per hour of labor input.

-Human capital

-GDP per capita

-Labor productivity

4) A way to increase economic transactions,

-includes reducing the number of patents (exclusive rights to a product or process).

-Includes higher taxes to fund local government.

-includes enforcing contractual laws that protect parties involved in contacts.

5) According to the U.S. Census Bureau data ________ have the lowest unemployment rate.

-young African-American women

-middle-aged Hispanic men

-older caucasian women

6) What does the US unemployment rate range normally return to as the long-run average?

-Somewhere between 5% and 7%.

-Somewhere between 2% and 4%.

-Somewhere between 4% and 6%.

Answer 1

1. $32,000 billion

Explanation: Real GDP = Nominal GDP/Deflator * 100 = $16,000/50 * 100 = $32,000.

2. Adjusted for inflation.

Explanation: Real variables take inflation into account.

3. Labor productivity

Explanation: Productivity of input measures the output per unit of the input.

4. includes enforcing contractual laws that protect parties involved in contacts.

Explanation: This would build trust in the market system.