Module 11 MCQ Practice 1. If the price index in a country were 100 for the year 2010 and 120 for 2015 and nominal gross domestic product in 2015 were $480 billion, then real gross domestic product for 2015 in 2010 dollars would be a. about $360 billion. b . about $380 billion. C. about $400 billion. d. about $600 billion. e. Indeterminate with the given information. Table 3.1 Current or GDP price GDP price nominal deflator index deflator index Year GDP (2000 = 100) (2010 = 100) 2000 $500 100 2010 $1,200 200 100 2 . (Based on Table 3-1) The value of the gross domestic product in 2010, in terms of 2000 prices, was * a. $600 b. $700 C. $1,000. d. $1,200 e. $1,300 3. (Based on Table 3-1) If 2010 were made the base year for the GDP price deflator index, the value of the index number for 2000 (rounded to the nearest whole number) would be * a. 0. b. 42. C . 142. d. 212 e . 256 4. Suppose a factory added $5,000 worth of output this year. Incidentally, the waste from this factory caused $1,000 worth of loss to the neighboring waterways. As a result, gross domestic product will * a. increase by $5,000. b. increase by $4,000. C. increase by $1,000. d. decrease by $4,000. e . decrease by $1,000 5. Which of the following is true if real GDP in Year 1 is $5,000 and in Year 2 is $5,200? * a. Output has increased by 4 percent b. Output has declined by 4 percent. C. Output change is uncertain. d. The economy is experiencing 4 percent inflation. e . The economy is experiencing a recession