Questions from General Economics

Q: A farmer sells wheat to a baker for $2. The

A farmer sells wheat to a baker for $2. The baker uses the wheat to make bread, which is sold for $3. What is the total contribution of these transactions to GDP?

Q: Many years ago, Peggy paid $500 to put together a

Many years ago, Peggy paid $500 to put together a record collection. Today, she sold her albums at a garage sale for $100. How does this sale affect current GDP?

Q: If the price of a hot dog is $2 and the

If the price of a hot dog is $2 and the price of a hamburger is $4, then 30 hot dogs contribute as much to GDP as _________ hamburgers. a. 5 b. 15 c. 30 d. 60

Q: When the economy goes into a recession, real GDP _________ and

When the economy goes into a recession, real GDP _________ and unemployment _________. a. rises, rises b. rises, falls c. falls, rises d. falls, falls

Q: Angus the sheep farmer sells wool to Barnaby the knitter for $

Angus the sheep farmer sells wool to Barnaby the knitter for $20. Barnaby makes two sweaters, each of which has a market price of $40. Collette buys one of them, while the other remains on the shelf o...

Q: Which of the following does NOT add to U.S.

Which of the following does NOT add to U.S. GDP? a. Air France buys a plane from Boeing, the U.S. aircraft manufacturer. b. General Motors builds a new auto factory in North Carolina. c. The city of N...

Q: Matthew and Susan are both optimizing consumers in the markets for shirts

Matthew and Susan are both optimizing consumers in the markets for shirts and hats, where they pay $100 for a shirt and $50 for hat. Matthew buys 4 shirts and 16 hats, while Susan buys 6 shirts and 12...

Q: An American buys a pair of shoes manufactured in Italy. How

An American buys a pair of shoes manufactured in Italy. How do the U.S. national income accounts treat the transaction? a. Net exports and GDP both rise. b. Net exports and GDP both fall. c. Net expor...

Q: Which is the largest component of GDP? a. consumption

Which is the largest component of GDP? a. consumption b. investment c. government purchases d. net exports

Q: If all quantities produced rise by 10 percent and all prices fall

If all quantities produced rise by 10 percent and all prices fall by 10 percent, which of the following occurs? a. Real GDP rises by 10 percent, while nominal GDP falls by 10 percent. b. Real GDP rise...