ECON 201 Final Exam:ECON 201 Final Study Guide: Questions & Answers:Latest Updated

Which of the following describes a negative output gap? a. none of these b. actual GDP is above potential GDP c. actual GDP is below potential GDP d. actual GDP equals potential GDP (Ans- c. actual GDP is below potential GDP Using 2001 as the base year, what is real GDP in 2001? In 2001 there were 10 units of A at $2 per unit and 10 units of B at $3 per unit. In 2002, there were 20 units of A at $4 per unit and 5 units of B at $4 per unit. (Hint: make your own table). a. $105 b. none of these c. $55 d. $50 (Ans- d. $50 An increase in the price level for all goods is called: a. incorporationb. inflation c. deflation d. disinflation (Ans- b. inflation Gross Domestic Product is the total market value of all a. consumer goods sold during a year b. services produced in a year c. commodities sold in a year d. production during a year (Ans- d. production during a year Suppose the typical consumer consumes the following basket: 5 corn dogs and 5 cokes. Now suppose that prices of corn dogs were $3 each in 2000 and $4 each in 2001, and prices of cokes were $1 each in 2000 and $2 each in 2001. What is the cost of this basket in 2000? a. $20 b. $25 c. $10 d. $7 (Ans- a. $20