profit.

rent.

unemployment benefits.

government purchases.

wages.

intermediate production.

Net National Product.

investment.

depreciation.

consumption.

a haircut.

the value of a lawyer’s services.

a 2005 Honda made in Swindon.

All of things mentioned in these answers should be counted in 2005 GDP.

a home built in 2004 and first sold in 2005.

final goods and services, intermediate goods, transfer payments, and rent.

consumption, investment, government purchases, and net exports.

consumption, transfer payments, wages, and profits.

Net National Product, Gross National Product, and Disposable personal income.

investment, wages, profits, and intermediate production.

British-owned firms no matter where they are located in the world.

none of these answers.

the domestic service sector only.

people and factories located within the borders of the UK.

the domestic manufacturing sector only.

intermediate goods.

final goods and services.

manufactured goods.

inferior goods and services.

normal goods and services.

must have fallen.

must have risen.

must have stayed the same.

may have risen, fallen, or stayed the same because there is not enough information to determine what happened to real output.

€50.

€100.

€650.

€500

€600.

the value of taking a day off from work

consulting services

intermediate sales

illegal drug sales

housework

foreign; domestic

current year; base year

domestic; foreign

base year; current year

intermediate; final

13 percent

0 percent

16 percent

38 percent

22 percent

intermediate production exceeds final production.

foreigners are producing more in the UK than Britons are producing in foreign countries.

real GNP exceeds nominal GNP.

real GDP exceeds nominal GDP.

Britons are producing more in foreign countries than foreigners are producing in the UK.

Lawyer services purchased by a home buyer.

The purchase of a new Nissan produced in Sunderland.

Copper purchased by tap manufacturer Bristan.

A new art gallery purchased by the city of Newcastle.

Lawn care services purchased by a home owner.

Consumption increases by €40,000 and net exports decreases by €40,000.

Net exports increases by €40,000.

There is no impact because this transaction does not involve domestic production.

Investment increases by €40,000 and net exports increases by €40,000.

Net exports decreases by €40,000.

investment.

net exports.

government purchases.

consumption.

none of these answers.

All of these answers are used to measure inflation.

consumer price index.

producer price index.

GDP deflator.

finished goods price index.

Clothing and footwear.

Furniture, household equipment and maintenance. See Figure 24.1 in the textbook.

Transport

Food and non-alcoholic beverages

All of these answers would produce the same impact

5.4 percent

30.7 percent

You can't tell without knowing the base year.

5.1 percent

6.7 percent

An increase in the price of BMWs produced in Germany and sold in the UK.

An increase in the price of Peugeots produced in the UK.

An increase in the price of helicopters purchased by the Royal Navy.

An increase in the price of domestically produced armoured vehicles sold exclusively to India.

consumer production.

products purchased by the typical consumer.

raw materials purchased by firms.

total current production.

none of these answers.

none of these answers.

substitution bias.

base year bias.

bias due to unmeasured quality change.

bias due to the introduction of new goods.

0 percent

13.3 percent

11 percent

9.2 percent

none of these answers

10.3 percent

none of these answers

11 percent

13.3 percent

0 percent

fallen.

You can't tell without knowing the base year.

risen.

stayed the same.

4 percent.

10 percent.

-4 percent.

3 percent.

21 percent.

none of these answers

The nominal interest rate is the inflation rate minus the real interest rate.

The real interest rate is the nominal interest rate minus the inflation rate.

The nominal interest rate is the real interest rate minus the inflation rate.

The real interest rate is the sum of the nominal interest rate and the inflation rate.

3/8 percent.

5 percent.

11 percent.

24 percent.

-5 percent.

The nominal rate of interest is 15 percent and the inflation rate is 14 percent.

The nominal rate of interest is 20 percent and the inflation rate is 25 percent.

The nominal rate of interest is 12 percent and the inflation rate is 9 percent.

The nominal rate of interest is 5 percent and the inflation rate is 1 percent.

The nominal rate of interest is 12 percent and the inflation rate is 9 percent.

The nominal rate of interest is 20 percent and the inflation rate is 25 percent.

The nominal rate of interest is 5 percent and the inflation rate is 1 percent.

The nominal rate of interest is 15 percent and the inflation rate is 14 percent.

neither borrowers nor lenders will gain because the nominal interest rate has been fixed by contract.

none of these answers

borrowers will gain at the expense of lenders.

lenders will gain at the expense of borrowers.

none of these answers

workers will gain at the expense of firms.

neither workers nor firms will gain because the increase in wages is fixed in the labour agreement.

firms will gain at the expense of workers.