100.

If the CPI increases from 180.0 to 198.0 between year 1 and year 2, the economy has experienced: A) inflation of 10.0 percent. B) inflation of 5.0 percent. C) deflation of 10.0 percent. D) deflation of 5.0 percent.

101

If the GDP deflator in 2009 equals 250 and nominal GDP in 2009 equals $14 trillion, what is the value of real GDP in 2009?

A) $16.5 trillion

B) $14.0 trillion

C) $56.0 trillion

D) $5.6 trillion

102

The national income accounts identity, for an open economy, is:

A) Y = C + I + G - NX (note: NX = exports - imports).

B) Y = C + I + G + NX (note: NX = exports - imports).

C) Y = C + I + G.

D) Y = C + I - G

104

If GDP (measured in billions of current dollars) is $5,500, consumption is $3,600, investment is $740, and net exports are -$1,800, then government purchases are:

A) $4,000.

B) -$1,960.

C) $2,960.

D) $2,540

105

In the national income accounts, the purchase of durables, nondurables, and services by households are classified as:

A) consumption.

B) investment.

C) government purchases.

D) net exports.

106

All of the following actions are investments in the sense of the term used by macroeconomists except:

A) a local contractor building a new residential home.

B) a local oil company building a new pipeline.

C) John Smith buying 100 shares of Google stock.

D) an entrepreneur constructing a new warehouse for her growing business.

107

If the CPI increases from 180.0 to 198.0 between year 1 and year 2, the economy has experienced: A) inflation of 10.0 percent. B) inflation of 5.0 percent. C) deflation of 10.0 percent. D) deflation of 5.0 percent

108

Assume that the equation for demand for bread at a small bakery is Q^d = 60 - 12P_b + 4Y, where Q^d is the quantity of bread demanded in loaves and Y is the average income in the town in thousands of dollars. What is the value of Q^d assuming P_b = 3 and Y = 2?

A) 48

B) 96

C) 36

D) 32

109

) In the demand equation Q^d = 60 - 12P_b + 4Y, Q^d is an endogenous variable.

A)True

B) False

110

If the consumption function is given by C = 500 + 0.5(Y - T), and Y is 4,000 and T is 1,000, then C equals:

A) 4,000.

B) 3,000.

C) 3,500.

D) 2,000.

111

In the classical (general equilibrium) model with fixed output, the supply and demand for goods and services are balanced by:

A) government spending.

B) taxes.

C) the interest rate

D) exports

112

When there is a fixed supply of loanable funds, an increase in investment demand results in a(n):

A) higher interest rate.

B) lower interest rate.

C) increase in investment.

D) decrease in investment.