Econ- 5.1 Part 2 Fromative Assessment- Option 1

Open Ended

Suppose a small economy produces only four goods: apples, bananas, cars, and computers. In a given year, the quantities and prices are as follows:

• Apples: 1,000 units at $2 each

• Bananas: 2,000 units at $1 each

• Cars: 50 units at $20,000 each

• Computers: 200 units at $1,000 each

Calculate the nominal GDP of this economy. SHOW YOUR WORK BY UPLOADING AN IMAGE OF THE MATH YOU DID TO FIND YOUR ANSWER.

Multiple Choice

Which of the following statements is true regarding nominal GDP and real GDP?

• Nominal GDP is adjusted for inflation, while real GDP is not.

• Real GDP is adjusted for inflation, while nominal GDP is not.

• Both nominal GDP and real GDP are adjusted for inflation.

• Neither nominal GDP nor real GDP are adjusted for inflation.

Multiple Choice

How do economists adjust nominal GDP to obtain real GDP?

• By applying the exchange rate.

• By using the GDP deflator.

• By using the expenditures approach for finding GDP.

• By calculating the gross national product.

Multiple Choice

Why might a country's nominal GDP be significantly higher than its real GDP during a period of high inflation?

• Because the quantity of goods/services produced increased.

• Because the value of the country's currency has increased.

• Because prices of goods/services are rising faster than the rate of production.

• Because the government has increased its spending.

Multiple Choice

Which measure of GDP is more useful for comparing the economic growth of a country over time?

• Nominal GDP because it reflects the current market prices.

• Real GDP because it adjusts for inflation and shows true growth in production

• Nominal GDP because it is easier to calculate.

• Real GDP because it includes the value of intermediate goods.

Open Ended

In 2010, a country had a nominal GDP of $700 billion and a GDP deflator of 140. Calculate the real GDP for 2010. SHOW YOUR WORK BY UPLOADING AN IMAGE OF THE MATH YOU DID TO FIND YOUR ANSWER.

Open Ended

Given that the nominal GDP is $4,500 billion and the GDP deflator is 90, what is the real GDP? SHOW YOUR WORK BY UPLOADING AN IMAGE OF THE MATH YOU DID TO FIND YOUR ANSWER.

Open Ended

In Year 1, the real GDP of a country is $1,000 billion. In Year 2, the real GDP is $1,100 billion. Calculate the real GDP growth rate between these two years. SHOW YOUR WORK BY UPLOADING AN IMAGE OF THE MATH YOU DID TO FIND YOUR ANSWER.

Open Ended

The real GDP of a country is $1,200 billion in Year 1 and $1,080 billion in Year 2. What is the real GDP growth rate? SHOW YOUR WORK BY UPLOADING AN IMAGE OF THE MATH YOU DID TO FIND YOUR ANSWER.

Open Ended

In Year 1, the nominal GDP is $1,000 billion with a GDP deflator of 100. In Year 2, the nominal GDP is $1,200 billion with a GDP deflator of 110. Calculate the real GDP growth rate. SHOW YOUR WORK BY UPLOADING AN IMAGE OF THE MATH YOU DID TO FIND YOUR ANSWER.

Open Ended

The real GDP of the US is $1,400,000 in Year 1 and $1,440,000 in Year 2. What is the real GDP growth rate? Is the growth rate at the goal economic growth rate for the US? Explain. SHOW YOUR WORK BY UPLOADING AN IMAGE OF THE MATH YOU DID TO FIND YOUR ANSWER.

Open Ended

The real GDP of the US is $5,550,000 in 2022 and $8,047,500 in Year 2. What is the real GDP growth rate? Is the growth rate at the goal economic growth rate for the US? Explain. SHOW YOUR WORK BY UPLOADING AN IMAGE OF THE MATH YOU DID TO FIND YOUR ANSWER.

Open Ended

The real GDP of a large country is $5,000 billion, and the population is 300 million. Calculate the per capita real GDP. SHOW YOUR WORK BY UPLOADING AN IMAGE OF THE MATH YOU DID TO FIND YOUR ANSWER.