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True/False
Indicate whether the statement is true or false.
____ 2. If Canada’s GDP is $1000 billion and Poland’s GDP is $100 billion, the average Canadian citizen must be ten
times as well-off as the average Polish citizen.
____ 3. For the year 2005, nominal GDP is $10 billion and real GDP is $11 billion, so the GDP deflator is 110.
____ 4. GDP can be measured by counting final sales at each level of production.
____ 5. Capital income (profits, rental payments and interest payments) is the largest component of income.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
TRUE/FALSE
MULTIPLE CHOICE
True/False
Indicate whether the statement is true or false.
____ 2. An increase in the price of a domestically produced capital good will increase the GDP deflator but not the
CPI.
____ 3. The interest rate a bank pays is the nominal interest rate, and the interest rate adjusted for inflation is the real
interest rate.
____ 5. When inflation is high, lenders will charge a high nominal interest rate.
Multiple Choice
Identify the choice that best completes the statement or answers the question.
TRUE/FALSE
MULTIPLE CHOICE