Econ 104 Final – Goffe (NEW UPDATED VERSION) LATEST ACTUAL EXAM QUESTIONS AND CORRECT ANSWERS (VERIFIED QUESTIONS AND ANSWERS) | GUARANTEED PASS A+ []

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Econ 104 Final – Goffe (NEW UPDATED VERSION) LATEST ACTUAL EXAM
QUESTIONS AND CORRECT ANSWERS (VERIFIED QUESTIONS AND ANSWERS) |
GUARANTEED PASS A+ [2026-2027]




Nominal GDP - CORRECT ANSWER the value of final goods and services evaluated
at current-year prices



QUESTION : How to calculate nominal GDP - CORRECT ANSWER C + I + G +NX



QUESTION : Real GDP - CORRECT ANSWER The value of final goods and
services evaluated at base-year prices



QUESTION : How to calculate real GDP - CORRECT ANSWER P*Q for every good
in GDP and add them all together

BASE YEAR

2014 - 100M visits at $50 each 2015 - 103M visits at $53

10M cars at $20,000 each 11M cars at $20,500 each



real GDP for 2015: (103M * $50 + 11M * 20,000)

2015Q(1) * 2014P(1) + 2015Q(2) * 2014 P(2)




2026 2027 GRADED A+

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QUESTION : Monetary Policy - CORRECT ANSWER federal reserve's dual
mandate (which focuses on max employment, stable prices, and moderate long-term
interest rates)



QUESTION : What will result from the Fed increasing the federal rate? - CORRECT
ANSWER Costs for banks will increase and loan rates for consumers and firms will
increase. This leads to slower growth.



QUESTION : Fiscal Policy - CORRECT ANSWER Controlled by the president and
congress. It is the government budget.



QUESTION : GDP Deflator - CORRECT ANSWER uses nominal and real GDP to
measure the price level (not in dollars)



QUESTION : Price level - CORRECT ANSWER The average price of all goods and
services in an economy



QUESTION : How to calculate GDP deflator - CORRECT ANSWER
(Nominal/Real)*100



QUESTION : CPI - CORRECT ANSWER used to correct nominal prices and wages
over time for the impact of inflation using market basket prices



QUESTION : How to calculate CPI - CORRECT ANSWER (market base price in
current year/ market basket price in base year)*100



QUESTION : Limitations of GDP - CORRECT ANSWER 1. Doesn't account for
change in quality.


2026 2027 GRADED A+

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2. Doesn't account for underground economy.

3. Doesn't account for 'bads' of economy

4. Doesn't account for non-market production



QUESTION : Limitations of CPI - CORRECT ANSWER Substitution bias, increase
in quality bias, new product bias, outlet bias.



QUESTION : Core Inflation - CORRECT ANSWER ignores food/energy, as they can
be more volatile



QUESTION : Headline inflation - CORRECT ANSWER takes food and energy in to
account when calculating



QUESTION : Real prices - CORRECT ANSWER what would have been paid for the
same good or service in the base year based on inflation



QUESTION : Real wages - CORRECT ANSWER wages based on the base year



QUESTION : Inflation rate (Calculation) - CORRECT ANSWER (CPI this year -
CPI last year)/ CPI last year



QUESTION : Real interest rate (calculation) - CORRECT ANSWER nominal
interest rate - inflation rate



QUESTION : Real interest rate - CORRECT ANSWER provides a better measure of
the true cost of borrowing and the true rate of return of lending than nominal interest rates


2026 2027 GRADED A+