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has an Econ Test on Friday. I basically want a B in this class because its a 4 Credit Class and a B weighs heavily on my GPA. The teacher hands out study guides in forms of past test questions hes used in the past to help us study. Basically one of the questions in exam 4 is this.
Spoiler:
In Iowa, the two products produced are corn and hogs. In 2001, 20 bushels of corn are
sold at $5 per bushel, and 8 hogs are sold at $50 each. In 2000, the base year, the price of
corn was $10 per bushel, and the price of hogs was $75 each.
a. Nominal 2001 GDP is $500, real 2001 GDP is $800, and the GDP deflator is
62.5.
b. Nominal 2001 GDP is $500, real 2001 GDP is $800, and the GDP deflator is 160.
c. Nominal 2001 GDP is $800, real 2001 GDP is $500, and the GDP deflator is
62.5.
d. Nominal 2001 GDP is $800, real 2001 GDP is $500, and the GDP deflator is 160
I already know the answer is A (Study Guide has answers at the bottom)
Now I've used a calculator and did some math. I did
2001 Corn - 5 X 20 = 100
2000 Corn - 10 x 20 = 200
01 Hogs - 8 x 50 = 400
00 Hogs 8 x 75 = 600
Then I added
100 + 400 = 500
200 + 600 = 800
This now eliminates C and D as my answers. However, I must've nodded off in class during the key portion because my formula for GDP Deflator isn't working. I keep getting variants of 1111.11. Would anyone know how I would get the GDP Deflator?
Edit : Thread is being updated for another math related question.
I've got three questions relating to Reserve Ratios and I've tried doing the math, but I'm screwing it up bad. Here are the three questions on my study guide.
Spoiler:
For the following question use the balance sheet below.
5. If the reserve requirement is 10 percent, this bank:
a. is holding excess reserves of $100.
b. is in a position to make a new loan of $150.
c. has total reserves of $400.
d. holding no excess reserves.
6. If the reserve ratio is 25 percent, an additional $5,000 of reserves will increase the money
supply by:
a. $15,000
b. $125,000
c. $25,000
d. $20,000
7. If the reserve ratio is 100 percent, depositing $500 of paper money in a bank will increase
the money supply by:
a. $0
b. $500
c. $5,000
d. $500,000
I already know the answers are D A A in that order. How to get these answers is what I don't know. For #5 I tried doing .10 X 1000, and ended up getting 100. I subtracted 100 from 250 and chose the wrong answer. For the other two I tried backtracking to my notes and scribbled a few random equations out and got nothing. The most I recall is there's a step involving 1 / 1/P (P being interest?), but got lost in the translation. Can I get assistance in doing these three? Its three easy points that I don't want to lose on the test.
Field MarshalIllinoisRegistered User regular
Posts
so 500/800 = 5/8 =.625
*100 = 62.5
edit: be careful which is ontop. if you switch the formula to real/nominal, you'll get B as the answer.
<100% if the price of stuff has gone down with time
and
>100% if the price of stuff has gone up with time.