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Econ 104 Bill Goffe Final Exam Prep
Newest Actual Exam With Complete
Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+
Money - - ANS✔️--1. Medium of exchange
2. Store of value
3. Unit of account
4. Standard of deferred payment
Current Nominal GDP - - ANS✔️--$18 trillion
Current Real GDP - - ANS✔️--$16.4 trillion
Current GDP deflator - - ANS✔️--110
Anticipated inflation - - ANS✔️--value of money declines and menu costs need to change
Unanticipated inflation - - ANS✔️--reduces real wages and real interest rates
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Business Cycle - - ANS✔️--alternating periods of economic expansion and economic recession
Nominal GDP - - ANS✔️--the value of final goods and services evaluated at current-year prices
How to calculate nominal GDP - - ANS✔️--C + I + G +NX
Real GDP - - ANS✔️--The value of final goods and services evaluated at base-year prices
How to calculate real GDP - - ANS✔️--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)
Monetary Policy - - ANS✔️--federal reserve's dual mandate (which focuses on max employment,
stable prices, and moderate long-term interest rates)
What will result from the Fed increasing the federal rate? - - ANS✔️--Costs for banks will
increase and loan rates for consumers and firms will increase. This leads to slower growth.
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Fiscal Policy - - ANS✔️--Controlled by the president and congress. It is the government budget.
GDP Deflator - - ANS✔️--uses nominal and real GDP to measure the price level (not in dollars)
Price level - - ANS✔️--The average price of all goods and services in an economy
How to calculate GDP deflator - - ANS✔️--(Nominal/Real)*100
CPI - - ANS✔️--used to correct nominal prices and wages over time for the impact of inflation
using market basket prices
How to calculate CPI - - ANS✔️--(market base price in current year/ market basket price in base
year)*100
Limitations of GDP - - ANS✔️--1. Doesn't account for change in quality.
2. Doesn't account for underground economy.
3. Doesn't account for 'bads' of economy
4. Doesn't account for non-market production
Limitations of CPI - - ANS✔️--Substitution bias, increase in quality bias, new product bias, outlet
bias.
Econ 104 Bill Goffe Final Exam Prep
Newest Actual Exam With Complete
Questions And Correct Detailed Answers
(Verified Answers) |Already Graded A+
Money - - ANS✔️--1. Medium of exchange
2. Store of value
3. Unit of account
4. Standard of deferred payment
Current Nominal GDP - - ANS✔️--$18 trillion
Current Real GDP - - ANS✔️--$16.4 trillion
Current GDP deflator - - ANS✔️--110
Anticipated inflation - - ANS✔️--value of money declines and menu costs need to change
Unanticipated inflation - - ANS✔️--reduces real wages and real interest rates
,2|Page
Business Cycle - - ANS✔️--alternating periods of economic expansion and economic recession
Nominal GDP - - ANS✔️--the value of final goods and services evaluated at current-year prices
How to calculate nominal GDP - - ANS✔️--C + I + G +NX
Real GDP - - ANS✔️--The value of final goods and services evaluated at base-year prices
How to calculate real GDP - - ANS✔️--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)
Monetary Policy - - ANS✔️--federal reserve's dual mandate (which focuses on max employment,
stable prices, and moderate long-term interest rates)
What will result from the Fed increasing the federal rate? - - ANS✔️--Costs for banks will
increase and loan rates for consumers and firms will increase. This leads to slower growth.
, 3|Page
Fiscal Policy - - ANS✔️--Controlled by the president and congress. It is the government budget.
GDP Deflator - - ANS✔️--uses nominal and real GDP to measure the price level (not in dollars)
Price level - - ANS✔️--The average price of all goods and services in an economy
How to calculate GDP deflator - - ANS✔️--(Nominal/Real)*100
CPI - - ANS✔️--used to correct nominal prices and wages over time for the impact of inflation
using market basket prices
How to calculate CPI - - ANS✔️--(market base price in current year/ market basket price in base
year)*100
Limitations of GDP - - ANS✔️--1. Doesn't account for change in quality.
2. Doesn't account for underground economy.
3. Doesn't account for 'bads' of economy
4. Doesn't account for non-market production
Limitations of CPI - - ANS✔️--Substitution bias, increase in quality bias, new product bias, outlet
bias.
