High School

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**QUESTION 20**

The nominal value of a good is

a. the price of the good in today's dollars.

b. the good's value expressed in purchasing power terms.

c. the good's anticipated value one year from now.

d. the price of the good in today's dollars, minus an anticipated inflation premium.

**QUESTION 21**

The price index that measures the changes in prices of ALL goods and services produced by the economy is the

a. CPI

b. PCE Index

c. Gross Domestic Product (GDP) Price Index

d. PPI

**QUESTION 22**

Bill lends Sara $1000 for a year at a nominal interest rate of 7%. If both Bill and Sara expect the inflation rate to be 4% next year, then the real interest is

a. 3%

b. -3%

c. 28%

d. 11%

**QUESTION 23**

The CPI tends to overstate the true inflation rate because

a. the market basket fails to weigh housing costs sufficiently.

b. it fails to consider the effects of new products in the marketplace.

c. we cannot know what the true inflation rate is.

d. the market basket actually selected is inappropriate.

**QUESTION 24**

During an unanticipated inflation

a. creditors are hurt and debtors are helped.

b. both creditors and debtors are hurt.

c. both creditors and debtors are helped.

d. creditors are helped and debtors are hurt.

**QUESTION 25**

Gross Domestic Product measures

a. the total value of labor used in the economy.

b. the total worth of all goods consumed within the borders of a nation.

c. the total income received by residents of a nation.

d. the total market value of final goods and services produced within a nation's borders.

**QUESTION 26**

Which of the following would be included when calculating Gross Domestic Product?

a. the purchase of a used $10,000 automobile from a friend.

b. a Social Security check for $800.

c. none of these.

d. the purchase of a previously owned house for $270,000.

**QUESTION 27**

Which of the following transactions would be included in Gross Domestic Product (GDP)?

a. The purchase of 100 shares of General Motors stock.

b. The purchase of a used car.

c. The purchase of new tires by a family to replace worn out tires on the family car.

d. The purchase of 2 grams of cocaine.

**QUESTION 28**

If you buy stocks and bonds, the dollar value of those stocks and bonds is

a. included in Gross Domestic Product (GDP) under investment.

b. included in Gross Domestic Product (GDP) if the stocks and bonds were issued by business firms but not if they were issued by governments.

c. included in Gross Domestic Product (GDP) under consumer expenditure.

d. not included in calculating Gross Domestic Product (GDP) for they merely represent a transfer of ownership.

**QUESTION 29**

Suppose that for the economy of Utopia, we have the following information for 2018: consumption expenditures = $5,000; wages $3,500; gross private domestic investment = $1,200; government expenditures = $2000; exports = $900; imports = $1,100. Using the expenditure approach, what would the Gross Domestic Product (GDP) be for Utopia in 2018?

a. $11,900

b. $6,200

c. $11,500

d. $8,000

**QUESTION 30**

Which of the following spending components makes up the largest percentage of Gross Domestic Product (GDP)?

a. Government expenditures

b. Consumption expenditures

c. Gross private domestic investment expenditures

d. Expenditures on net exports of goods and services

**QUESTION 31**

Which one of the following is a durable consumer good?

a. office supplies that will be used up this year

b. food

c. a home computer

d. gasoline

Answer :

QUESTION 20:
The nominal value of a good is the price of the good in today's dollars. It represents the actual dollar amount that is paid for the good without considering inflation or changes in purchasing power.

QUESTION 21:
The price index that measures the changes in prices of ALL goods and services produced by the economy is the GDP Price Index. It takes into account the prices of all goods and services produced within a nation's borders.

QUESTION 22:
To calculate the real interest rate, we need to subtract the inflation rate from the nominal interest rate. In this case, the nominal interest rate is 7% and the expected inflation rate is 4%. Therefore, the real interest rate would be 3%.

QUESTION 23:
The CPI tends to overstate the true inflation rate because the market basket used to calculate it may not accurately represent the average consumer's spending patterns. It may not adequately weigh housing costs or consider the effects of new products in the marketplace.

QUESTION 24:
During an unanticipated inflation, creditors are hurt and debtors are helped. This is because the value of money decreases, so creditors who are owed money receive repayment in less valuable currency. On the other hand, debtors who owe money can repay their debts with currency that is worth less than when they borrowed it.

QUESTION 25:
Gross Domestic Product (GDP) measures the total market value of final goods and services produced within a nation's borders. It includes the value of all goods and services produced, regardless of whether they are consumed or saved.

QUESTION 26:
When calculating Gross Domestic Product (GDP), the purchase of a used $10,000 automobile from a friend would not be included. Only the production of final goods and services within a nation's borders is counted in GDP.

QUESTION 27:
The purchase of new tires by a family to replace worn out tires on the family car would be included in Gross Domestic Product (GDP). It represents a transaction involving the production of goods within the nation.

QUESTION 28:
If you buy stocks and bonds, the dollar value of those stocks and bonds is not included in calculating Gross Domestic Product (GDP) because they merely represent a transfer of ownership. However, if the stocks and bonds were issued by business firms, they would be included under investment.

QUESTION 29:
To calculate Gross Domestic Product (GDP) using the expenditure approach, we add up the different components of spending in the economy. In this case, GDP would be calculated as follows:
Consumption expenditures + Gross private domestic investment + Government expenditures + Exports - Imports = $5,000 + $1,200 + $2,000 + $900 - $1,100 = $8,000

QUESTION 30:
Consumption expenditures make up the largest percentage of Gross Domestic Product (GDP). This includes spending by households on goods and services such as food, clothing, and housing.

QUESTION 31:
A durable consumer good is an item that is expected to last for a long time. In this case, a home computer would be considered a durable consumer good.

Learn more about GDP at https://brainly.com/question/31199521

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