BADM 7200 Exam 2 (Faik Koray, Online) – Complete Practice Question Bank Louisiana State University V1

BADM 7200 Exam 2 (Faik Koray, Online) –
Complete Practice Question Bank Louisiana
State University V1 & V2 2026/2027


Based on verified exam materials from LSU's
BADM 7200E (Economic Environment of the
Firm), the following question bank covers
Exam 2 content, which focuses on measuring
GDP, cost of living, inflation, unemployment,
and the open economy framework .




SECTION 1: GDP MEASUREMENT AND
COMPONENTS (Questions 1-40)


Q1. Nominal GDP is defined as:
- A) GDP adjusted for inflation




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,- B) The total market value of all goods and
services produced within a country during a
specific time period, without adjusting for
inflation
- C) GDP measured at constant prices
- D) The value of intermediate goods produced


Correct Answer: B)


Rationale: Nominal GDP measures the current
market value of all final goods and services
produced, without adjusting for price changes.
Real GDP adjusts for inflation .


Q2. The GDP deflator is calculated as:
- A) Real GDP / Nominal GDP
- B) Nominal GDP / Real GDP


2

,- C) Nominal GDP × Real GDP
- D) Real GDP × 100


Correct Answer: B) Nominal GDP / Real GDP


Rationale: The GDP deflator = (Nominal GDP
/ Real GDP) × 100. It measures the price level
of all domestically produced final goods and
services .


Q3. If nominal GDP rises from $100 billion to
$110 billion and real GDP rises from $100
billion to $105 billion, the GDP deflator:
- A) Rises from 100 to 104.76
- B) Rises from 100 to 110
- C) Falls from 100 to 95
- D) Remains constant at 100


3

, Correct Answer: A) Rises from 100 to 104.76


Rationale: Year 1: (100/100) × 100 = 100. Year
2: (110/105) × 100 ≈ 104.76 .


Q4. Which of the following is a nondurable
good?
- A) Automobile
- B) Refrigerator
- C) Food
- D) House


Correct Answer: C) Food




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