Table 19-1 -Refer to Table 19-1. Suppose That a Simple Economy Produces

question 199

Multiple Choice

Table 19-1

-Refer to Table 19-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals

• A) 3,090 units.
• B) $7,250.
• C) $8,750.
• D) $9,750.

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Definitions:

Collateral

An asset or property that a borrower offers to a lender as security for a loan, which the lender can seize if the borrower fails to make required payments.

Installment Loan

A loan that is repaid over time with a set number of scheduled payments.

Stated Annual Rate

The interest rate of a financial product, such as a loan or savings account, as advertised before the effects of compounding and fees.

Cost

The value or price paid to acquire, produce, or maintain a good or service.