Question : 21) If the GDP price index 125 and nominal GDP : 1240919

21) If the GDP price index is 125 and nominal GDP is $130 billion, then real GDP equals ________ billion.

A) $104.00

B) $162.50

C) $96

D) $1.04

E) $9.6

22) Suppose that in 2012, real GDP is larger than nominal GDP. The GDP price index in 2012 is definitely

A) negative.

B) larger than the GDP price index in 2012.

C) less than the GDP price index in 2012.

D) greater than 100.

E) less than 100.

23) The ________ is the average hourly wage rate measured in current dollars, while the ________ is the average hourly rate measured in the dollars of a given reference base year.

A) real interest rate; nominal interest rate

B) nominal wage rate; real wage rate

C) real wage rate; nominal wage rate

D) nominal interest rate; real interest rate

E) inflation rate; real wage rate

24) In order to determine if the quantity of goods and services that an hour’s work can buy has increased or decreased between 2000 and 2012, one should compare the

A) 2000 nominal wage with the 2012 nominal wage.

B) 2000 real wage with the 2012 nominal wage.

C) 2000 real wage with the 2012 real wage.

D) 2000 nominal wage with the 2012 real wage.

E) 2000 nominal wage with the 2012 nominal wage and the 2000 real wage with the 2012 real wage because both are important factors determining if workers can buy more or fewer goods with an hour’s work.

25) A change in the real wage rate measures the change in the

A) price of goods and services that an hour’s work can buy.

B) nominal wage of an hour’s work.

C) quantity of goods and services that an hour’s work can buy.

D) inflation rate affecting the labor market.

E) CPI.

26) Suppose that residents of France have seen their real wage rate increase over time. This means that

A) French workers’ inflation rate has increased over time.

B) French workers have increased their average hours of labor over time.

C) French workers have received increases in their nominal wage rate over time.

D) French workers have increased buying power.

E) the CPI must have decreased over time.

27) The change in the quantity of goods and services that an hour’s work can buy is measured by the

A) nominal wage.

B) real wage.

C) CPI.

D) real interest rate.

E) inflation rate.

28) When firms decide how much labor to hire, one of the factors that influences them is the

A) nominal wage rate plus the inflation rate.

B) nominal wage rate divided by the price level and then multiplied by 100.

C) nominal wage rate minus the inflation rate.

D) real wage rate plus the inflation rate.

E) nominal wage rate divided by the inflation rate and then multiplied by 100.

29) Which of the following formulas would you use to calculate the nominal wage rate?

A) nominal wage rate = real wage rate ÷ CPI

B) nominal wage rate = real wage rate × CPI

C) nominal wage rate = (real wage rate × CPI) ÷ 100

D) nominal wage rate = (real wage rate × CPI) × 100

E) nominal wage rate = (real wage rate ÷ CPI) × 100

30) Nominal and real wage rates

A) must always change by the same amount.

B) must always change in opposite directions by the same amount.

C) must always change in the same direction but could change by different amounts.

D) could change in opposite directions.

E) must always change in the same direction, and the nominal wage rate must change more rapidly than the real wage rate.