Chapter 9

When there is inflation (LO5) a) real GDP increases faster than nominal GDP b) nominal GDP increases faster than real GDP c) nominal GDP and real GDP increase at the same rate d) there is no way of telling whether nominal GDP or real GDP increases faster

If GDP rose from \(\$ 6\) trillion to \(\$ 9\) trillion and prices rose by 50 percent over this period, \((\mathrm{LO})\) a) real GDP fell by 100 percent b) real GDP fell by 50 percent c) real GDP stayed the same d) real GDP rose by 50 percent e) real GDP rose by 100 percent

Which of the following is counted in GDP? (LO8) a) Household production b) Illegal production c) Leisure time d) Government spending e) Voluntary work

Suppose the GDP of Argentina were 10 times that of Uruguay. Which statement would be most accurate? (LO6) a) There is no way of comparing the output of Argentina and Uruguay. b) Argentina's output is greater than that of Uruguay. c) Argentina's output is probably around 10 times that of Uruguay. d) Argentina's output is 10 times that of Uruguay.

Which statement is true? (LO2,8) a) GDP tells us how much we produce as well as what we produce. b) GDP tells us neither how much we produce nor what we produce. c) GDP tells us what we produce. d) GDP tells us how much we produce.

We would like to compare per capita real GDP. Which would be the most valid comparison? (LO6, 7) a) China in 2004 and Thailand in 2004 b) Germany in 2002 and 2004 c) The United States in 1980 and 2004 d) Nigeria in 1960 and the United Kingdom in 1990

Per capita real GDP is found by (LO7) a) dividing population by real GDP b) dividing real GDP by population c) adding population to real GDP d) multiplying real GDP by population

Which statement is true? (LO7) a) Over longer and longer periods of time, comparisons of real per capita GDP become increasingly valid. b) Over the short run, say, up to 10 years, comparisons of per capita real GDP are quite valid. c) International comparisons of per capita real GDP may be made with less caution than comparisons over time within a given country. d) None of these statements is true.

\(\mathrm{C}+\mathrm{I}+\mathrm{G}+\mathrm{X}_{\mathrm{n}}\) is approach(es) to GDP. (LO1,2) a) the flow-of-income b) the expenditures c) both the expenditures and the flow-of-income d) neither the expenditures nor the flow-of-income

Which is the most accurate statement about the underground economy? (LO8) a) It adds hundreds of billions of dollars to our GDP. b) It provides employment to hundreds of thousands of illegal immigrants. c) It is run almost entirely by organized crime. d) It makes the rich richer and the poor poorer.