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Exam Name___________________________________ 1) Consider a small economy with 3 individuals. Individual A produces 100 chickens that sell for $8 each. Individual B produces 50 bags of corn that sell for $10 each. Individual C produces 40 bushels of apples that sell for $20 each. National product in this economy is A) $2100. B) $2470 C) 190 units of goods produced. D) 100 chickens plus 50 bags of corn plus 40 bushels of apples. E) not determinable from the information provided. 2) If a countryʹs labour force is 15 million people, and 500 000 of those are unemployed, the countryʹs unemployment rate is A) 2.5 percent. B) 3.3 percent. C) 4.5 percent. D) 6.7 percent. E) 9.0 percent. 3) Consider the situations of a lender of money and a borrower of money. Which of the following situations is least burdensome for the borrower? A) nominal interest rate of 15% and an inflation rate of 8% B) nominal interest rate of 8% and an inflation rate of 2% C) nominal interest rate of 29% and an inflation rate of 21% D) nominal interest rate of 10% and an inflation rate of 1% E) nominal interest rate of 4% and an inflation rate of 4% 4) If 0.75 U.S. dollars can be exchanged for one Canadian dollar, we say that the Canadian -U.S. exchange rate is A) 1.33. B) 0.75. C) 1.25. D) 75. E) 1.0. 5) If the Consumer Price Index changes from 120 in year one to 144 in year two, the rate of inflation in the intervening year is A) 10 percent. B) 12.5 percent. C) 20 percent. D) 25 percent. E) 30 percent. 1 Answer Key Testname: SAMPLEQUESTIONS_CHAP19 1) A Topic: 19.1b. national output/national income 2) B Topic: 19.1d. employment, unemployment and the labour force 3) E Topic: 19.1h. real and nominal interest rates 4) A Topic: 19.1i. the exchange rate and depreciation/appreciation 5) C Topic: 19.1g. inflation and the price level 2