Question : 61) Assume that a small country produces only green peppers : 1240845

61) Assume that a small country produces only green peppers and red peppers. Last year, it produced 100 green peppers and 50 red peppers and sold them at prices of $2 per green pepper and $3 per red pepper. This year, it produced 150 green peppers and 60 red peppers and sold them at prices of $2 per green pepper and $4 per red pepper. What is real GDP this year if the base year is last year? 

A) $540

B) $400

C) $480

D) $350

E) $890

Data for 2009           Data for 2010

62) The table above gives the production and prices for a small nation that produces only bread and soda. The base year is 2009. What is nominal GDP in 2009?

A) $410

B) $450

C) $900

D) $550

E) $460

63) The table above gives the production and prices for a small nation that produces only bread and soda. The base year is 2010. What is real GDP in 2010?

A) $530

B) $1080

C) $510

D) $210

E) $300

64) When calculating real GDP, the reference base year

A) allows us to account for changes in GNP compared to GDP.

B) always reduces the value of GDP compared to GNP.

C) allows us to calculate the value of the goods and services in terms of prices of that base year.

D) usually increases the value of GNP compared to GDP.

E) allows us to increase the value of goods and services.

65) In calculating GDP, economists

A) measure total expenditure as the only true measure.

B) can measure either total expenditure or total income.

C) measure total income as the only true measure.

D) measure total income minus total expenditure.

E) measure total income plus total expenditure.

66) The expenditure approach to measuring GDP is based on summing

A) wages, interest, rent, and profit.

B) each industry’s production.

C) the total values of final goods, intermediate goods and services, used goods, and financial assets.

D) consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services.

E) consumption expenditure, investment, government expenditure on goods and services, and net exports of goods and services minus wages, interest, rent, and profit.

67) Which of the following is NOT included in the expenditure approach to calculating GDP?

A) government expenditures on goods and services

B) investment

C) net exports of goods and services

D) wages

E) consumption expenditure

68) Suppose GDP is $10 billion, consumption expenditure is $7 billion, investment is $2 billion, and government expenditure on goods and services is $2 billion. Net exports of goods and services must be

A) $1 billion.

B) -$1 billion.

C) $2 billion.

D) -$2 billion.

E) $10 billion.

69) According to the expenditure approach to measuring GDP, in the United States , the largest component of GDP is

A) consumption expenditure.

B) investment.

C) government expenditure on goods and services.

D) net exports of goods and services.

E) wages.

70) Expenditures in GDP do not include

A) used goods or financial assets.

B) financial assets or investment.

C) used goods or investment.

D) investment, stocks, or bonds.

E) government expenditures on goods and services.