1.The primary policy goals of the United States are A. a rapid economic growth r
ID: 1227836 • Letter: 1
Question
1.The primary policy goals of the United States are
A.
a rapid economic growth rate, low unemployment and price stability.
B.
sustainable economic growth, low unemployment and price stability.
C.
a rapid economic growth, zero unemployment and zero inflation.
D.
sustainable economic growth, zero unemployment and price stability
2. Which of the following is a true statement about real and nominal GDP?
A.
If nominal GDP increases from one year to the next, we know that production of goods and services has risen.
B.
If real GDP increases from one year to the next, we know that production of goods and services has risen.
C.
Increases in average prices do not affect the calculation of nominal GDP.
D.
Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and service year after year.
3. Which of the following is included in both the U.S. GDP and U.S. GNP?
A.
the value of all cars produced by Nissan in Japan and the U.S.
B.
the value of all cars produced by Ford in Mexico
C.
the value of all cars produced by General Motors in the U.S.
D.
the value of all cars produced by Toyota in the U.S.
4.
Explanation / Answer
1. D) SUSTAINABLE ECONOMIC DEVELOPMENT, ZERO UNEMPLOYMENT AND PRICE STABILITY.
ALL THESE ARE REQUIRED BY THE FEDERAL GOVERNMENT TO MAINTAIN A STRONG ECONOMY.
2. B) IF REAL GDP RISES FROM ONE YEAR TO THE NEXT, WE KNOW THAT PRODUCTION OF GOODS AND SERVICES HAS RISEN.
3. C) THE VALUE OF ALL CARS PRODUCED BY GENERAL MOTORS IN U.S.
GDP INCLUDES THE PRODUCTION OF ALL DOMESTIC FIRMS IN THE TERRITORY AND GNP ALSO INCLUDES THE SAME BUT IT ALSO INCLUDES THE PRODUCTION AT OTHER PLACES BY THE DOMESTIC FIRM, HOWEVER IT IS NOT GIVEN IN THE QUESTION.
NISSAN AND TOYOTA ARE FOREIGN FIRMS WHEREAS FORD DOMESTIC PRODUCTION IS NOT GIVEN.
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