ECO 372T Wk 1 - Apply: Quiz

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ECO 372T Wk 1 - Apply: Quiz

If real GDP in a year was $3,668 billion and the price index was 112, then nominal GDP in that year was approximately

Multiple Choice

•      $3,925 billion.
•      $4,108 billion.
•      $3,846 billion.
•      $4,379 billion.

Answer this question based on the given information for an economy in some year.

1. Dollar value of resource extraction activity = $20 billion
2. Dollar value of production activity = $50 billion
3. Dollar value of distribution activity = $60 billion
4. Dollar value of final output = $110 billion

Gross output for this economy equals

Multiple Choice

•      $240 billion.
•      $170 billion.
•      $130 billion.
•      $110 billion.

Refer to the graphs. Suppose a firm is currently producing 500 computers per week and charging a price of $1,000. What happens to the firm's inventory of computers if there is a negative demand shock and prices are flexible?

Multiple Choice

•      The firm’s inventory will not change.
•      The firm’s inventory will increase by 200 computers per week.
•      The firm’s inventory will decrease by 150 computers per week.
•      The firm’s inventory will increase by 350 computers per week.

Arthur sells $100 worth of cotton to Bob. Bob turns the cotton into cloth, which he sells to Camille for $300. Camille uses the cloth to make prom dresses that she sells to Donita for $500. Donita sells the dresses for $900 to kids attending the prom. The total contribution to GDP of this series of transactions is

Multiple Choice

•      $900.
•      $1,700.
•      $1,800.
•      $800.