1. When a firm produces a product in current year but is unable to sell it during the year, current-year investment expenditure and current-year consumption expendi- ture -, resulting in in current-year GDP. (a) increase; increase; an increase (b) has no change; has no change; no change (c) increase; has no change; an increase (d) has no change; decrease; decrease. 2. Suppose that apples cost $0.5 in 2002 and $1 in 2007, whereas orange costs $1 in 2002 and $1.5 in 2007. If in a hypothetical economy, 4 apples were produced in 2002 and 5 in 2007, whereas 3 oranges were produced in 2002 and 4 in 2007, what is the real GDP in 2007 (with 2002 as the base year)? (a) $5 (b) $6.5 (c) $9.5 (d) $11 3. Suppose that there is a decrease in the price of an imported good that is in the con- sumption basket of the typical consumer. In calculating the inflation rate using the CPI versus the GDP deflator, (a) the CPI approach overstates the inflation rate compared to the GDP deflator ap- proach. (b) the CPI approach understates the inflation rate compared to the GDP deflator approach. (c) the CPI approach and the GDP deflator approach give the same measure of inflation rate. (d) the GDP deflator approach is always a better measure than the CPI approach