~ 12 A A Aar Find AaBbCcDc|AaBbCcD. AaBbC( AaBb AaBbCcD 4 Replace X X A~ ~ A 1 Normal 1 No Spac... Heading 1 Heading 2 Heading 3 Select Font Paragraph Styles Editing or edit files, you'll need to renew your subscription Renew Class, below you will see a total of ten questions. Using the highlighter function in Microsoft Word highlight the correct answer or delete the wrong answer (underlined). Areas which require a response via checking a box, simply click on your answer choice. Some areas may require you to type in your answer. If you prefer to write your answers on a separate document this is also acceptable. 1. The economy's income and expenditure The following diagram presents a circular-flow model of a simple economy. The outer set of arrows (shown in green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households Markets for Factors of Production Based on this model, households earn income when HOUSEHOLDS OR FocusX 2 A - 2. A. = Heading 1 Heading 2 Heading Sel Font magraph Styles Edit dit files, you'll need to renew you set of arrows (shown I green) shows the flow of dollars, and the inner set of arrows (shown in red) shows the corresponding flow of inputs and outputs. Markets for Goods and Services Firms Households H Markets for Factors of Production Based on this model, households earn income when HOUSEHOLDS OR FIRMS purchase LABOR & CAPITAL OR GOODS & SERVICES in markets for factors of production. Suppose Yvette earns $675 per week working as a programmer for Maction. She uses $9 to have a pint at Breanna's Brewing Company. Breanna's Brewing Company pays Sean $500 per week to serve as head brewer, Sean uses $375 to purchase software from Maction ns: On 19 Accessibility: Investigate FocusComments BbCCD AaB Find AaBbCCD AaBbCCD( AaBbCCD: AaBbCCD( AaBbCcD( AaBbCCD Replace eading 3 Title Subtitle Subtle Em... Emphasis Intense E... Strong Quote Dictate Select ~ Styles Editing Voice Identify whether each of the following events in this scenario occurs in the market for factors of production or the market for goods and services. Market for Factors Market for Goods Event of Production and Services Yvette spends $9 to have a pint. Yvette earns $675 per week working for Maction Sean earns $500 per week working for Breanna's Brewing Company. Which of the elements of this scenario represent a flow from a firm to a household? This could be a flow of dollars, inputs, or outputs. Check all that apply. The beer Yvette receives Yvette's labor The $500 per week Sean earns working for Breanna's Brewing Company True or False: The actual economy is more complicated than the simple one illustrated in this circular-flow diagram. True False 2. Activities included (and not included) in the calculation of GDP The gross domestic product (GDP) of the United States is defined as the COST OF PRODUCING, MARKET VALUE OF OR WHOLESALE COST OF all FINAL AND INTERMEDIAE GOODS AND SERVICES, FINAL GOODS AND SERVICES PRODUCED, OR FINAL GOODS NAD SERVICES CONSUMED WITHIN THE UNITED STATES, BY U.S. CITIZENS OR BY U.S.-OWNED COMPANIES in a given period of time. Based on this definition, indicate which of the following transactions will be included in (that is, directly increase) the GDP of the United States in 2021.To create or 2021 GDP Scenario Included Excluded Billy Bonka's, a German chocolate company, produces a chocolate bar at a plant in Pennsylvania on December 9 2021. A high schooler buys the chocolate bar on December 24 Athena's, a U.S. shoe company, produces a pair of basketball shoes at a plant in honduras on March 27, 2021. Athena's imports the pair of basketball shoes into the United States on May 18, 2021, Cleancutters, a U.S. lumber company, produces wood at a plant in Oregon on September 25, 2021, It sells the wood to Buildit and Partners, a developer, for use in the production of a new house that will be built in the U United States in 2021. (Note: Focus exclusively on whether production of the wood increases GDP directly, and ignore the effect of production of the new house on GDP Thickburger, a U'S. fast-food company, produces a double cheeseburger at one of its many locations throughout the Midwest on January 14, 2021. It sells the double cheeseburger to a customer that same day. An accountant starts a client's 2021 tax return on April 14, 2022, finishing it just before midnight on April 15, 2022. 3. Categories of expenditures Lorenzo and Neha Stewart live in Conshohocken, PA. Neha's father, Sam, lives in Sweden For each of the following transactions that occur in their lives, identify whether it is included in the calculation of U.S. GDP as part of consumption (C), investment (!), government purchases (G), exports (0, or imports (M). Check all that apply.Replace Strong Quote Di Select Editing Transaction C I G X M Neha's father in Sweden orders a bottle of Vermont maple syrup from the producer's website Neha gets a new video camera made in the United States. Lorenzo's employer upgrades all of its computer systems using U.S.-made parts. Neha buys a new BMW, which was assembled in Germany- The Federal Aviation Administration expands the runways at Philadelphia International Airport, which is just a few miles from Lorenzo and Neha's house. 4. Effects of a tariff on international trade The following graph shows the domestic demand for and supply of oranges in Guatemala. The world price (PWPW) of oranges is $550 per ton and is displayed as a horizontal black line. Throughout the question, assume that all countries under consideration are small, that is, the amount demanded by any one country does not affect the world price of oranges and that there are no transportation or transaction costs associated with international trade in oranges. Also, assume that domestic suppliers will satisfy domestic demand as much as possible before any exporting or importing takes place. FocusFont RIPTION To create or edit files, you'll need to renew your subscription Renew 830 Domestic Demand Domestic Supply 795 780 725 690 865 PRICE (Dollars per ton) 620 585 PW 550 515 480 0 50 100 150 200 250 300 350 400 450 500 QUANTITY (Tons of oranges) If Guatemala is open to international trade in oranges without any restrictions, it will Import tons of oranges. Suppose the Guatemalan government wants to reduce imports to exactly 200 tons of oranges to help domestic producers. A tariff of | per ton will achieve this. A tariff set at this level would raise in revenue for the Guatemalan government. 5. Limitations of GDP Although GDP is a reasonably good measure of a nation's output, it does not necessarily include all transactions and production for that nation. Which of the following scenarios are either not accounted for or measured inaccurately by either the income or the expenditure methods of calculating GDP for the United States? Check all that apply. The costs of overfishing and other overly intensive uses of resources Expenditures on federal highways 1606 words Text Predictions: On 1% Accessibility: Investigate Type here to search n a WHeading asIs Intense E... strong Quote Select ~ Editing Voi The value produced by doing your own laundry When a U.S. company purchases and imports wood from Brazil to use to build new houses within the United States, this purchase increases the GOVERNMENT PURCHASES, CONSUMPTION OR INVESTMENT component of GDP while also DECREASING OR INCREASING net exports by the same amount. Therefore, the purchase of wood from Brazil causes AN OVERALL DECREASE, NO OVERALL CHANGE OR AN OVERALL INCREASE _in US GDP. 6. Problems and Applications Q4 The CPI for "All Items" was 250.546 in April 2018, and 255.548 in April 2019. Over this period, the rate of inflation as measured by the rate of change of the CPI was 0.98% OR -1.96% OR 2.00% OR 0.50%_ I True or False: When one calculates a single rate of inflation using the CPI for "All Items," it does not necessarily mean that all categories of goods and services experienced the same rate of price change over that period. C True False 7. Problems and Applications Q5 A small nation of 10 people idolizes the TV show The Voice. All they produce and consume are karaoke machines and CDs, in the following amounts: Karaoke Machines CDS Price Price Quantity (Dollars) Quantity (Dollars) 2020 10 20 50 13 2021 15 30 60 15 Using a method similar to that used to calculate the consumer price index, the percentage change in the overall price level is 20.00% OR 23.53% OR 25.00% OR 80.95% (Note: Use 2020 as the base year, and fix the basket at 1 karaoke machine and 5 CDS.) Using a method similar to that used to calculate the GDP deflator, the percentage change of the overall price level is 23.53% OR 25.00% OR 27.06% OR 80.00% (Note Focus 71.F SunnySCRIPTION To create or edit files, you'll need to renew ur subscription Renew which of the following statements is correct? Check all that apply. The CPI holds the basket of goods and services constant. The GDP deflator allows the basket of goods and services to change. The inflation rate in 2021 is not the same using the two methods. 8. Problems and Applications Q6 Which of the following situations illustrate the problem of unmeasured quality change in the construction of the CPI? Check all that apply. Increased personal computer purchases in response to a decline in their price More scoops of raisins in each package of Raisin Bran The invention of cell phones The introduction of air bags in cars Greater use of fuel-efficient cars after gasoline prices increase 9. Problems and Applications Q8 Social Security benefits are increased each year in proportion to the increase in the CPI, even though most economists believe that the CPI overstates actual inflation. True or False: If older people consume the same market basket as other people, then Social Security would provide a decrease in their standard of living. True False Healthcare costs have risen faster than overall inflation. True or False: If older people consume a market basket that includes more healthcare than other people, then Social Security would have an uncertain impact on their standard of living True False 10. Problems and Applications Q9 Suppose that a borrower and a lender agree on the nominal interest rate to be paid on a loan. Then inflation turns out to be lower than they both expected. True or False: The real interest rate on this loan is higher than expected. 606 words Text Predictions: On 1% Accessibility: Investigate Type here to search n a Walexisfgr400@gmail.com A Comment BbCCD ADD AaBbCCE AaBbCCDI Find AaBbCCD( AaBbCCD( AaBbCcDc AaBbCCD Replace ading 3 Title Subtitle Subtle Em.. Emphasis Intense E... Strong Quote Select ~ Styles Editing True False The lender LOSES OR GAINS from this unexpected lower inflation, and the borrower LOSES OR GAINS under these circumstances. Inflation during the 1970s was much higher than most people had expected when the decade began. Homeowners who obtained fixed-rate mortgages during the 1960s BENEFITED FROM OR WERE HARMED BY the unexpected higher inflation (with regard to their mortgages, and the banks that made the mortgage loans BENEFITED OR WERE HARMED