1. Net Domestic Product is given by:

a. GNP - Depreciation.

b. Inflation - Depreciation.

c. Real GDP - Depreciation.

d. GDP - Depreciation.

2. CPI suffers from:

a. All the other options are true.

b. Quality Bias

c. Substitution Bias

d. New Product Bias

3. The Fischer Equation is given by:

a. Inflation Rate = Nominal Interest Rate + Real Interest Rate.

b. Nominal Interest Rate = Real Interest Rate - Inflation Rate

c. Real Interest Rate + GDP growth rate = Nominal Interest Rate

d. Real Interest Rate + Inflation Rate = Nominal Interest Rate

4. The natural rate of unemployment in the economy will ___________ if LRAS shifts to the left.

a. rise

b. become cyclical

c. remain unchanged

d. fall