QUESTION 1 10points Save Answer Consumption v is the largest and most stable component of GDP Net Exports v represents the foreign component of GDP When v increases, v usually declines. This phenomenon is known as V QU ESTIO N 2 10 points Save Answer Gibson guitars are made in the United States. This year, Gibson made $600 worth of new guitars. $200 of stock was sold domestically, while $350 was sold internationally. The remaining $50 was put into inventory for next year. Which of the following US GDP accounts are affected? C] Consumption C] Investment C] Government Purchases C] Net Exports QUESTION 3 10points Save Answer Using the data below, what is the value of Nominal GDP for the current year? base year I] current year P Q | |P Q | | lBasketballS $4.31 20 $5.29 40 Baseballs $4.44 D$321 1 Round to two (2) decimal places if necessary :] QUESTION 4 10 points Save Answer Using the data below, what is the value of Real GDP for the current year? base year currentyear Q Q Basketballs $2.94 20 $7.57 40 Baseballs $3.79 20 $3.36 10 Round to two (2) decimal places if necessary QUESTION 5 10 points Save Answer Dorabji Industries is an Indian-owned and operated car manufacturing firm in Jamshedpur. If you purchase ten shares of Dorabji stock on the Mumbai National Stock Exchange, this is an example of Foreign | Investment Kimberlite Lid is a British-owned mining company that operates in Zimbabwe. Although it pays local taxes, profits are returned to Britain. This is an example of Foreign| |Investment Although Foreign Direct Investment can help build (human/physical) capital in a developing country through electrical grids, roads, and large factories; economists generally prefer to recommend Foreign Portfolio Investment because it can help build (human/physical) capital by transferring skills and knowledge to local workers. This is important because advances in (human/physical) capital accounts for the majority of economic growth QUESTION 6 10 points Save Answer Suppose that a firm's production function is given by F(K,L,M), where K = capital, L = labor, and M = land (i.e. "materials"). So for example, F(3 tools, 3 workers, 5 materials) = 9 units of product If this function experiences constant returns to scale and F(8, 7, 12) = 21, then what is F(24, 21, 36)?QUESTION 7 10 points Save Answer Economic (growth/development) is the process by which a country's GDP increases over time, and it is caused by investments in (human/physical) capital. Economic (growth/development) is the process by which a country's standards of living increase over time, and it is caused by investments in (human/physical) capital such as health and education. However, no country experiences economic (growth/development) without first having economic (growth/development) QUESTION 8 10 points Save Answer A new house built in Buffalo, NY (belongs/doesn't belong) in this year's GDP because it is a v (intermediate/final) good, bought in a market, made inside the US' border this year You buy a brand new pair of shoes and find that there are shoelaces included in the box. The shoelaces are new and (intermediate/final) goods, so they (belong/don't belong) in this year's GDP Bread (belongs/doesn't belong) in the CPI, and toasters (belong/don't belong) because the average consumer (buys/doesn't buy) bread, and (buys/doesn't buy) toasters QUESTION 9 10 points Save Answer Using the data below, what is the value of the CPI for the current year? base year currentyear P Q P Q Bread $4.75 20 $7.43 20 Butter $7.75 18 $2.26 18 Round to two (2) decimal places if necessaryQUESTION 10 10 points Save Answer In 2007, the median cost of a new home was $235,500 (source: https://www.census.gov/const/uspricemon.pdf). If the CPI in 2007 was 100, and the CPI in 2017 was 136.15, what would the cost of a new home in 2007 be in 2017 dollars? Do not include a dollar sign in your answer. Round your answer to two (2) decimal places if necessary