QUESTION 1

According to the Coursera GLOSSARY for Modules 1-4 of the first part of this course, Gross National Product (GNP) is

a. the market value of all final goods and services produced in a country during a given period.

b. the market value of all the final goods and services produced by the nationals of a country during a given period.

c. the market value of all the final goods and services produced by the nationals of a country in that country during a given period.

d. the market value of all final goods and services produced in a country during a given period measured in an international currency.

e. the market value of all final goods and services produced in a country during a given period measured at prices of a given base year.

QUESTION 2 According to the Background Notes for Module 1 of this course, goods and services produced in an economy, but not transacted in the market,

a. are never included in the GDP of that economy, and there are no exceptions.

b. are always included in the GDP of that economy, and there are no exceptions.

c. are generally not included in the GDP of that economy, but there are exceptions.

d. are always included in the GDP of other economies, and there are no exceptions.

QUESTION 3 The goods produced in a given year but kept in inventories for later sale

a. are treated as intermediate goods and, therefore, are not included in the GDP.

b. are valued at cost and added to the GDP of the year in which they are produced.

c. are valued at market prices and added to the GDP of the year in which they are sold.

d. are valued at market prices and added to the GDP of the year in which they are produced.

QUESTION 4 On June 1, 2020, in Boston, Anupama bought a new Honda Accord, which was produced entirely in the United States and using all US-made components in 2020, at the total price of $25,000. The dealer suggested Honda Financial Services could finance the car with a six-year, zero down payment loan at the annual interest rate of 0.262 percent. This meant that Anupama had to pay $350 a month for 72 months, starting July 1, 2020. She thought the financing was a good deal and accepted it. Assume that arranging the financing of the car was costless. How much did the production and sale of this car add to the 2020 US GDP?

a. $2,100.

b. $25,000.

c. $25,200

d. $27,100.

e. $50,200

QUESTION 5 According to the US Bureau of Labor Statistics (BLS), in April 2021 the U.S. labor force increased by 430,000, when compared to the situation in March 2021. At the same time, the number of people unemployed increased by 102,000. How much did the total employment in the US change in April 2021 compared to March 2021?

a. -532,000

b. -328,000

c. +102,000

d. +328,000

e. +532,000

QUESTION 6 .The Federal Statistics Office of Germany has calculated the annual constant-price and chain-rule GDP values for 2020 using 2019 as the base year for both. As was the case for many other economies, Germany suffered from a Covid-related recession in 2020. From what you know about the constant-price and chain-rule calculations, you expect that the 2020 constant-price GDP figure

a. to be lower than the 2020 chain-rule GDP figure.

b. to be the same as the 2020 chain-rule GDP figure.

c. to be higher than the 2020 chain-rule GDP figure.

d. to be lower than the 2020 chain-rule figure since 2020 was a recession year.

e. to be higher than the 2020 chain-rule figure since 2020 was a recession year.

QUESTION 7 During the outbreak of COVID-19 in 2020, most households in the United States had decided to a prepare as many of their meals as possible at home. Each day they purchased the ingredients needed for 900 million meals at an average cost of $8 per meal at stores. They also purchased 100 million meals away from home at an average price of $15 per meal. With the vaccination rates growing in 2021, households are expected to increase their away from home meals 150 million, raising it to a total of 250 million meals. Naturally, at home meals are expected to decline by the same number, down to 750 million meals per day. Suppose 2020 is the base year for the calculation of the constant-price GDP in the United States. In that case, how much will this shift in food consumption pattern increase the constant-price GDP of the U.S. per day in 2021 compared to the situation in 2020?

a. $750 million per day

b. $1,050 million per day

c. $1,500 million per day

d. $2,250 million per day

e. $2,500 million per day

QUESTION 8. The Bureau of Labor Statistics (BLS) collects data on prices in U.S. markets and publishes a host of indices on its website. See, for example, https://www.bls.gov/cpi/tables/supplemental-files/home.htm, where a set of supplemental tables are posted. The News Release Tables 1 and 3 for April 2021 on this site show that between April 2020 and April 2021, the consumer price index grew by ____ if all items are taken into account and by ____ if energy is excluded.

a. 1.2 percent, 2.9 percent

b. 4.5 percent, 3.6 percent

c. 4.2 percent, 3.6 percent

d. 2.9 percent, 4.2 percent

e. 4.2 percent, 2.9 percent

QUESTION 9. In April 2020, American households shifted their pattern of food consumption in a significant way and prepared more of their meals at home due to the COVID-19 outbreak. This meant that they were buying far fewer meal away from home.

With the advent of vaccination against COVID-19, in April 2021 households partially restored their pre-pandemic pattern the food consumption and bought relatively more meals away from home and fewer meals at home compared to April 2020, with the total number of meals per household remaining constant. The price index for food at home in April 2021 was 1.2 percent higher than it had been in April 2020. The corresponding change in the price index for food away from home was 3.8 percent. For all other consumer items, the average price during the same period rose by 4.5 percent. Assume that for calculating these indices, the Bureau of Labor Statistics uses the basket of goods a typical household purchased in April 2020. In that case, the inflation rate derived by the BLS for food items between April 2020 and April 2021

a. is an accurate measure of the true increase in the cost of food consumption in that period.

b. underestimates the true increase in the cost of food consumption in that period.

c. overestimates of the true increase in the cost of food consumption in that period.

d. may underestimate or overestimate the true increase in the cost of food consumption in that period.

QUESTION 10. GDP deflator is a price index for

a. the value added produced in a country.

b. goods and services sold by firms in a country.

c. goods and services purchased by firms in a country.

d. goods and services purchased by the households in a country.