It took three years for country Avatar to build a highway connecting two large cities. The highway was put into use on 1 January 2019, with the total construction costs around 2 billion dollars between 2016-2018. Unfortunately, an earthquake substantially damaged 20% of the highway in the mid-2019. The government spent 100 million dollars in 2019 and 250 million dollars in 2020 to repair the damaged part.Which of the following happened in this scenario, if everything else remaining unchanged?

A. Avatar's GDP decreased by $2 billion in 2019.

B. Avatar's GDP decreased by $100 million in 2019.

C. Avatar's GDP decreased by $250 million in 2019.

D. Avatar's GDP increased by $100 million in 2019.

Today, Susan decides to bring her friends to dinner in a restaurant at the city centre, instead of cooking at home by herself, which is what she usually does. As a result of this transaction:

Group of answer choices

A. GDP could increase or decrease, depending on whether the dinner served by the restaurant tastes better or worse than the one cooked by Susan herself.

B. GDP will increase.

C. GDP will be unaffected because the same service would be performed in either case.

D. GDP will decrease.

Alan plans to buy a particular model of Asus laptop. Today, he findson the homepage of PB Tech that Asus releases an upgraded model with the chip 50% faster than the previous model, the memory size doubled, and the SSD capacity doubled. The price of the upgraded model remains the same as the previous one. Which problem in the construction of the Consumer Price Index (CPI) does this situation best represent?

A. Income growth

B. Unmeasured quality change.

C. Substitution bias.

D. Introduction of new goods.

Catherineearned a salary of $120,000 in 2020. Her uncle earned 60,000 in 2010. BothCatherineand her uncle live in Wellington. Suppose the consumer price index for 2010 is 1000. Which one of the following values of the consumer price index for 2020 would makeCatherineclearly better off in purchasing power terms in 2020 compared to her uncle in 2010?

A. Any value of the CPI strictly less than 2000.

B.A CPI of 3000.

C. A CPI exactly equal to 2000.

D. Any value of the CPI greater than 2000.

At the beginning of the year, Philip deposits $200 into his saving account which pays an annual interest rate of 4%. Inflation for the year is 1.5%. The nominal interest rate is ____ and the real interest rate is _____.

A. 4%, 1.5%

B. 2.5%, 1.5%

C. 4%, 2.5%

D. 2.5%, 4%

If two countries are economically identical except that one country has a higher crime rate than the other, then the level of GDP

A. is higher in the country with more non-market activities.

B. will be lower in the country with the higher crime rate.

C. will be higher in the country with the higher crime rate.

D. will be the same in both countries.