Question 1

To calculate the real GDP,Statistics Canada has started to consider both the quantities and prices in the base year and the following year and then average the two.

Accepted Answer

A) True 
 B)False

Question 2

The smallest component of aggregate spending in Canada is:

Accepted Answer

A)   net exports.
B)   government purchases.
C)   investment.
D)   consumption.

Question 3

Only three goods are produced in an economy in the following amounts: A = 10,B = 30,C = 5.The current year per unit prices of these three goods are A = $2,B = $3,and C = $1.
-Refer to the above information.If the per unit prices of the three goods each were $1 in a base year used to construct a GDP price index,then real GDP in the current year:

Accepted Answer

A)   is $110.
B)   is $115.
C)   is $45.
D)   cannot be determined on the basis of this data.

Question 4

An example of an intermediate good or service would be:

Accepted Answer

A)   bricks bought by a homeowner for constructing a patio.
B)   sacks of groceries bought by a dentist for his family.
C)   a car bought by a household for commuting to work.
D)   a desk bought by an accountant for her office.

Question 5

If nominal GDP in some year is $280 and real GDP is $160 the GDP price index for that year is:

Accepted Answer

A)   175
B)   57
C)   160
D)   280 A

Question 6

Which of the following best defines disposable income?

Accepted Answer

A)   income received by households less personal taxes
B)   the before-tax income received by households
C)   all income earned by resource suppliers for their current contributions to production
D)   the market value of the annual output net of consumption of fixed capital

Question 7

The table below indicates the price and output data over a five year period for an economy that produces only one good.
 
-Refer to the above data.If year 2 is the base year,the percentage increase in real GDP from year 2 to year 4 is:

Accepted Answer

A)   40 percent.
B)   60 percent.
C)   100 percent.
D)   80 percent. D

Question 8

GDP tends to overstate economic well-being because it takes into account:

Accepted Answer

A)   all of the illegal activities conducted by organized crime in the economy.
B)   spending on intermediate goods that are used to produce final goods.
C)   health care costs related to the consumption of products with adverse health effects.
D)   the personal labour time that car owners spend working on car repairs and maintenance of their vehicles.

Question 9

Historically,real GDP has increased less rapidly than nominal GDP because:

Accepted Answer

A)   price indices have not reflected improvements in product quality.
B)   the general price level has increased.
C)   technological progress has resulted in more efficient production.
D)   the general price level has declined.

Question 10

In an economy,the value of inventories rose from $100 billion in 2012 to $150 billion in 2013.In calculating total investment for 2013,national income accountants would:

Accepted Answer

A)   decrease it by $50 billion.
B)   increase it by $50 billion.
C)   decrease it by $100 billion.
D)   increase it by $150 billion.

Question 11

GDP excludes expenditures by:

Accepted Answer

A)   businesses on pollution control equipment.
B)   business for travel and entertainment.
C)   government on military hardware.
D)   consumers on used automobiles.

Question 12

A distinguishing characteristic of public transfer payments is that:

Accepted Answer

A)   they are used to subsidize the major transportation carriers to reduce transportation costs.
B)   they are counted as part of government purchases in the calculation of the gross domestic product.
C)   there is a tax on the amount of the subsidy above a certain income level.
D)   the recipients make no contribution to current production in return for them.

Question 13

Suppose a nation's 2008 nominal GDP was $972 billion and the general price index was 90.In order to make the 2008 GDP comparable with the base year GDP,the 2008 GDP must be:

Accepted Answer

A)   adjusted downward to $678 billion.
B)   deflated to $896 billion.
C)   inflated to $1080 billion.
D)   deflated to $1080 billion.

Question 14

If the economy adds to its inventory of goods during 2012:

Accepted Answer

A)   gross investment will exceed net investment by the amount of the inventory increase.
B)   this amount should be ignored in calculating 2012's GDP.
C)   this amount should be subtracted in calculating 2012's GDP.
D)   this amount should be included in calculating 2012's GDP.

Question 15

Net exports are:

Accepted Answer

A)   that portion of consumption and investment goods sent to other countries.
B)   exports plus imports.
C)   exports less imports.
D)   imports less exports.

Question 16

Gross domestic product (GDP) measures and reports output:

Accepted Answer

A)   as an index number.
B)   in percentage terms.
C)   in dollar amounts.
D)   in quantities of physical units (for example,kilos,litres,and bushels) . C

Question 17

Economists define investment to include:

Accepted Answer

A)   any increase in business inventories.
B)   the addition of cash to a savings account.
C)   the purchase of common or preferred stock.
D)   the purchase of any durable good,for example,an automobile or a refrigerator.

Question 18

If in some year gross investment was $120 billion and net investment was $65 billion,then in that year the country's capital stock:

Accepted Answer

A)   may have either increased or decreased.
B)   increased by $65 billion.
C)   increased by $55 billion.
D)   decreased by $55 billion.

Question 19

If real GDP falls from one period to another,we can conclude that:

Accepted Answer

A)   deflation occurred.
B)   inflation occurred.
C)   nominal GDP fell.
D)   less goods and services have been produced.

Question 20

Assume an economy which is producing only one product.Output and price data for a three-year period are as follows.
 
-Refer to the above data.If year 2 is chosen for the base year,in year 3 nominal GDP and real GDP,respectively,are:

Accepted Answer

A)   $180 and $30.
B)   $30 and $5.
C)   $180 and $120.
D)   $120 and $100.

Exam 7: Measuring the Economys Output

To calculate the real GDP,Statistics Canada has started to consider both the quantities and prices in the base year and the following year and then average the two.

Correct Answer
verified

The smallest component of aggregate spending in Canada is:

Correct Answer
verified

Correct Answer
verified

An example of an intermediate good or service would be:

Correct Answer
verified

If nominal GDP in some year is $280 and real GDP is $160 the GDP price index for that year is:

Correct Answer
verified
A

Which of the following best defines disposable income?

Correct Answer
verified

The table below indicates the price and output data over a five year period for an economy that produces only one good. -Refer to the above data.If year 2 is the base year,the percentage increase in real GDP from year 2 to year 4 is:

Correct Answer
verified
D

GDP tends to overstate economic well-being because it takes into account:

Correct Answer
verified

Historically,real GDP has increased less rapidly than nominal GDP because:

Correct Answer
verified

In an economy,the value of inventories rose from $100 billion in 2012 to $150 billion in 2013.In calculating total investment for 2013,national income accountants would:

Correct Answer
verified

GDP excludes expenditures by:

Correct Answer
verified

A distinguishing characteristic of public transfer payments is that:

Correct Answer
verified

Suppose a nation's 2008 nominal GDP was $972 billion and the general price index was 90.In order to make the 2008 GDP comparable with the base year GDP,the 2008 GDP must be:

Correct Answer
verified

If the economy adds to its inventory of goods during 2012:

Correct Answer
verified

Net exports are:

Correct Answer
verified

Gross domestic product (GDP) measures and reports output:

Correct Answer
verified
C

Economists define investment to include:

Correct Answer
verified

If in some year gross investment was $120 billion and net investment was $65 billion,then in that year the country's capital stock:

Correct Answer
verified

If real GDP falls from one period to another,we can conclude that:

Correct Answer
verified

Assume an economy which is producing only one product.Output and price data for a three-year period are as follows. -Refer to the above data.If year 2 is chosen for the base year,in year 3 nominal GDP and real GDP,respectively,are:

Correct Answer
verified

Exam 7: Measuring the Economys Output

To calculate the real GDP,Statistics Canada has started to consider both the quantities and prices in the base year and the following year and then average the two.

Correct AnswerverifiedShow Answer

The smallest component of aggregate spending in Canada is:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

An example of an intermediate good or service would be:

Correct AnswerverifiedShow Answer

If nominal GDP in some year is $280 and real GDP is $160 the GDP price index for that year is:

Correct AnswerverifiedA

Which of the following best defines disposable income?

Correct AnswerverifiedShow Answer

The table below indicates the price and output data over a five year period for an economy that produces only one good. -Refer to the above data.If year 2 is the base year,the percentage increase in real GDP from year 2 to year 4 is:

Correct AnswerverifiedD

GDP tends to overstate economic well-being because it takes into account:

Correct AnswerverifiedShow Answer

Historically,real GDP has increased less rapidly than nominal GDP because:

Correct AnswerverifiedShow Answer

In an economy,the value of inventories rose from $100 billion in 2012 to $150 billion in 2013.In calculating total investment for 2013,national income accountants would:

Correct AnswerverifiedShow Answer

GDP excludes expenditures by:

Correct AnswerverifiedShow Answer

A distinguishing characteristic of public transfer payments is that:

Correct AnswerverifiedShow Answer

Suppose a nation's 2008 nominal GDP was $972 billion and the general price index was 90.In order to make the 2008 GDP comparable with the base year GDP,the 2008 GDP must be:

Correct AnswerverifiedShow Answer

If the economy adds to its inventory of goods during 2012:

Correct AnswerverifiedShow Answer

Net exports are:

Correct AnswerverifiedShow Answer

Gross domestic product (GDP) measures and reports output:

Correct AnswerverifiedC

Economists define investment to include:

Correct AnswerverifiedShow Answer

If in some year gross investment was $120 billion and net investment was $65 billion,then in that year the country's capital stock:

Correct AnswerverifiedShow Answer

If real GDP falls from one period to another,we can conclude that:

Correct AnswerverifiedShow Answer

Assume an economy which is producing only one product.Output and price data for a three-year period are as follows. -Refer to the above data.If year 2 is chosen for the base year,in year 3 nominal GDP and real GDP,respectively,are:

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A

Correct Answer
verified

Correct Answer
verified
D

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
C

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified