Question 1

Net domestic income at market prices equals GDP income approach) minus

Accepted Answer

A) consumption expenditure. 
B) depreciation. 
C) taxes. 
D) subsidies. 
E) corporate profits. 
A) consumption expenditure. 
B) depreciation. 
C) taxes. 
D) subsidies. 
E) corporate profits.

Question 2

Complete the following sentence.Net exports equals

Accepted Answer

A) exports divided by imports. 
B) imports minus exports. 
C) exports plus imports. 
D) exports minus imports. 
E) foreign borrowing by residents of Canada minus domestic borrowing by nonresidents of Canada. 
A) exports divided by imports. 
B) imports minus exports. 
C) exports plus imports. 
D) exports minus imports. 
E) foreign borrowing by residents of Canada minus domestic borrowing by nonresidents of Canada.

Question 3

The expenditure approach measures GDP by adding together

Accepted Answer

A) the total expenditures of consumers and firms. 
B) the total expenditures of consumers, firms, net exporters, and by governments at all levels. 
C) wages, salaries and supplementary labour income, and other factor incomes. 
D) compensation of employees, rental income, corporate profits, net interest, proprietors' income, indirect taxes paid, and capital consumption expenditures, and by subtracting subsidies paid by the government. 
E) wages, salaries and supplementary labour income, other factor income, subsidies paid by the government, indirect taxes paid, and income of nonfarm unincorporated businesses. 
A) the total expenditures of consumers and firms. 
B) the total expenditures of consumers, firms, net exporters, and by governments at all levels. 
C) wages, salaries and supplementary labour income, and other factor incomes. 
D) compensation of employees, rental income, corporate profits, net interest, proprietors' income, indirect taxes paid, and capital consumption expenditures, and by subtracting subsidies paid by the government. 
E) wages, salaries and supplementary labour income, other factor income, subsidies paid by the government, indirect taxes paid, and income of nonfarm unincorporated businesses.

Question 4

The existence of which one of the following is a reason for the fact that GDP gives an underestimated value of total output in the economy?

Accepted Answer

A) market activities 
B) underground economy 
C) pollution 
D) depreciation 
E) environmental problems 
A) market activities 
B) underground economy 
C) pollution 
D) depreciation 
E) environmental problems

Question 5

In the Canadian economy, market prices and factor costs would be the same except for

Accepted Answer

A) depreciation. 
B) personal taxes. 
C) indirect taxes and subsidies. 
D) capital consumption. 
E) exports. 
A) depreciation. 
B) personal taxes. 
C) indirect taxes and subsidies. 
D) capital consumption. 
E) exports.

Question 6

The reference base year is 2017. To calculate the chained- dollar real GDP in 2018 we calculate

Accepted Answer

A) the value of the final goods and services produced in 2018 valued at the prices that prevailed in 2018. 
B) the value of final goods and services produced in the base year valued at the 2018 prices. 
C) the value of the final goods and services produced in 2018 valued at the prices that prevailed in the base year. 
D) the base- year GDP and add the average of the increases in real GDP calculated using 2017 prices and 2018 prices. 
E) nominal GDP in 2018 multiplied by price level. 
A) the value of the final goods and services produced in 2018 valued at the prices that prevailed in 2018. 
B) the value of final goods and services produced in the base year valued at the 2018 prices. 
C) the value of the final goods and services produced in 2018 valued at the prices that prevailed in the base year. 
D) the base- year GDP and add the average of the increases in real GDP calculated using 2017 prices and 2018 prices. 
E) nominal GDP in 2018 multiplied by price level.

Question 7

The largest component of GDP using the expenditure approach is

Accepted Answer

A) exports. 
B) government expenditure. 
C) consumption expenditure. 
D) imports. 
E) investment. 
A) exports. 
B) government expenditure. 
C) consumption expenditure. 
D) imports. 
E) investment.

Question 8

Use the table below to answer the following questions.
 
-Refer to Table 4.2.2.Net domestic income at market prices equals

Accepted Answer

A) $3,150. 
B) $2,450. 
C) $3,250. 
D) $3,050. 
E) $2,950. 
A) $3,150. 
B) $2,450. 
C) $3,250. 
D) $3,050. 
E) $2,950.

Question 9

Which one of the following flows from firms to households?

Accepted Answer

A) goods and services 
B) factor services 
C) payments for goods and services 
D) payments for loans 
E) loans 
A) goods and services 
B) factor services 
C) payments for goods and services 
D) payments for loans 
E) loans

Question 10

Suppose Angela falls in love with and subsequently marries her regularly employed housekeeper, Tony.What effect would this action have on GDP?

Accepted Answer

A) It would fall. 
B) It would rise. 
C) It would fall but then increase after the honeymoon was over. 
D) It would stay the same. 
E) It depends on whether he starts to work in the house free of charge or whether she still pays him. 
A) It would fall. 
B) It would rise. 
C) It would fall but then increase after the honeymoon was over. 
D) It would stay the same. 
E) It depends on whether he starts to work in the house free of charge or whether she still pays him.

Question 11

Use the information below to answer the following questions.
Fact 4.1.1
At the beginning of 2017, Peter's Perfectly Prickly Piercing Parlour had $5,000 worth of bellybutton and eyebrow rings on han computers each worth $1,000), 1 cash register worth $100, electrical equipment worth $500, and one piercing needle worth $5 the end of 2017, they had $5,000 worth of bellybutton and eyebrow rings, a new high speed computer worth $3,000 they had out the old ones), the same cash register, which was now worthless, electrical equipment worth $600, and they had upgraded the needle at a cost of $700 which was valued at $1,000.
-Refer to Fact 4.1.1.Peter's depreciation in 2017 is

Accepted Answer

A) $3,000. 
B) zero. 
C) $1,000. 
D) $2,300. 
E) $800. 
A) $3,000. 
B) zero. 
C) $1,000. 
D) $2,300. 
E) $800.

Question 12

Which one of the following is not an example of investment in the expenditure approach to measuring GDP? General Motors

Accepted Answer

A) buys shares in another company. 
B) replaces some worn- out stamping machines. 
C) adds 500 new cars to inventories. 
D) buys a new auto stamping machine. 
E) builds another assembly plant. 
A) buys shares in another company. 
B) replaces some worn- out stamping machines. 
C) adds 500 new cars to inventories. 
D) buys a new auto stamping machine. 
E) builds another assembly plant.

Question 13

Which one of the following would be included in the calculation of GDP by the expenditure approach?

Accepted Answer

A) the cost of new kitchen cupboards when you renovate your house 
B) the income you pay to your gardener 
C) the purchase of 20 shares of a new issue of IBM stock 
D) the purchase of an eighteenth century work of art 
E) the value of your brother's services when he mows the lawn for the family 
A) the cost of new kitchen cupboards when you renovate your house 
B) the income you pay to your gardener 
C) the purchase of 20 shares of a new issue of IBM stock 
D) the purchase of an eighteenth century work of art 
E) the value of your brother's services when he mows the lawn for the family

Question 14

If you want to investigate the claim that more goods and services were produced in the economy during 2017 than 2018, what should you study?

Accepted Answer

A) real GDP 
B) GDP calculated using the expenditure approach 
C) GDP calculated using the income approach 
D) nominal GDP 
E) intermediate GDP 
A) real GDP 
B) GDP calculated using the expenditure approach 
C) GDP calculated using the income approach 
D) nominal GDP 
E) intermediate GDP

Question 15

Which of the following is not a reason for GDP incorrectly measuring the value of total output?

Accepted Answer

A) leisure time 
B) environmental quality 
C) depreciation 
D) underground economic activity 
E) household production 
A) leisure time 
B) environmental quality 
C) depreciation 
D) underground economic activity 
E) household production

Question 16

Table 4.4.1
-Refer to Table 4.4.1.Chained- dollar real GDP in 2018 is

Accepted Answer

A) $3,050.00. 
B) $1,250.00. 
C) $2,700.00 
D) $1,707.75. 
E) $2,692.00. 
A) $3,050.00. 
B) $1,250.00. 
C) $2,700.00 
D) $1,707.75. 
E) $2,692.00.

Question 17

Use the figure below to answer the following questions.
   Figure 4.3.1
-Refer to Figure 4.3.1.In the figure, the distance between points T and U represents

Accepted Answer

A) a business cycle. 
B) an expansion. 
C) a trough. 
D) a peak. 
E) a recession. 
A) a business cycle. 
B) an expansion. 
C) a trough. 
D) a peak. 
E) a recession.

Question 18

A bakery uses flour to produce bread.When calculating GDP, we include _______ because when we add the value of the flour to the value of the loaf of bread to calculate GDP, the result is _______.

Accepted Answer

A) only the value of the flour used to produce the bread; double counting 
B) both the value of the bread sold in a store and the value of the flour used to produce the bread; the true value of the economy's output 
C) both the value of the bread sold in a store and the value of the flour used to produce the bread; double counting 
D) only the value of the bread sold in a store; double counting 
E) the value of the bread sold in a store, the value of the flour used to produce the bread, and the wage rate paid to the baker; less than the true value of the economy's output 
A) only the value of the flour used to produce the bread; double counting 
B) both the value of the bread sold in a store and the value of the flour used to produce the bread; the true value of the economy's output 
C) both the value of the bread sold in a store and the value of the flour used to produce the bread; double counting 
D) only the value of the bread sold in a store; double counting 
E) the value of the bread sold in a store, the value of the flour used to produce the bread, and the wage rate paid to the baker; less than the true value of the economy's output

Question 19

Use the table below to answer the following questions.
Table 4.2.6
There are only two goods in this economy.  
-Refer to Table 4.2.6.What is nominal GDP in the current year?

Accepted Answer

A) $460 
B) $350 
C) $180 
D) $150 
E) 80 loaves of bread and 100 cartons of milk 
A) $460 
B) $350 
C) $180 
D) $150 
E) 80 loaves of bread and 100 cartons of milk

Question 20

Table 4.4.4
-Refer to Table 4.4.4.The table provides data on the economy of Tropical Republic that produces only bananas and coconuts.The chained- dollar real GDP in 2018 expressed in 2017 dollars is

Accepted Answer

A) $7, 575.00 
B) $7,500.00 
C) $1.575.50 
D) $7,472.50 
A) $7, 575.00 
B) $7,500.00 
C) $1.575.50 
D) $7,472.50

Net domestic income at market prices equals GDP income approach) minus

Complete the following sentence.Net exports equals

The expenditure approach measures GDP by adding together

The existence of which one of the following is a reason for the fact that GDP gives an underestimated value of total output in the economy?

In the Canadian economy, market prices and factor costs would be the same except for

The reference base year is 2017. To calculate the chained- dollar real GDP in 2018 we calculate

The largest component of GDP using the expenditure approach is

Use the table below to answer the following questions. -Refer to Table 4.2.2.Net domestic income at market prices equals

Which one of the following flows from firms to households?

Suppose Angela falls in love with and subsequently marries her regularly employed housekeeper, Tony.What effect would this action have on GDP?

Which one of the following is not an example of investment in the expenditure approach to measuring GDP? General Motors

Which one of the following would be included in the calculation of GDP by the expenditure approach?

If you want to investigate the claim that more goods and services were produced in the economy during 2017 than 2018, what should you study?

Which of the following is not a reason for GDP incorrectly measuring the value of total output?

Table 4.4.1 -Refer to Table 4.4.1.Chained- dollar real GDP in 2018 is

Use the figure below to answer the following questions. Figure 4.3.1 -Refer to Figure 4.3.1.In the figure, the distance between points T and U represents

A bakery uses flour to produce bread.When calculating GDP, we include _ because when we add the value of the flour to the value of the loaf of bread to calculate GDP, the result is _.

Use the table below to answer the following questions. Table 4.2.6 There are only two goods in this economy. -Refer to Table 4.2.6.What is nominal GDP in the current year?

Table 4.4.4 -Refer to Table 4.4.4.The table provides data on the economy of Tropical Republic that produces only bananas and coconuts.The chained- dollar real GDP in 2018 expressed in 2017 dollars is

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

Exam 4: Measuring Gdp and Economic Growth

Net domestic income at market prices equals GDP income approach) minus

Complete the following sentence.Net exports equals

The expenditure approach measures GDP by adding together

The existence of which one of the following is a reason for the fact that GDP gives an underestimated value of total output in the economy?

In the Canadian economy, market prices and factor costs would be the same except for

The reference base year is 2017. To calculate the chained- dollar real GDP in 2018 we calculate

The largest component of GDP using the expenditure approach is

Use the table below to answer the following questions. -Refer to Table 4.2.2.Net domestic income at market prices equals

Which one of the following flows from firms to households?

Suppose Angela falls in love with and subsequently marries her regularly employed housekeeper, Tony.What effect would this action have on GDP?

Which one of the following is not an example of investment in the expenditure approach to measuring GDP? General Motors

Which one of the following would be included in the calculation of GDP by the expenditure approach?

If you want to investigate the claim that more goods and services were produced in the economy during 2017 than 2018, what should you study?

Which of the following is not a reason for GDP incorrectly measuring the value of total output?

Table 4.4.1 -Refer to Table 4.4.1.Chained- dollar real GDP in 2018 is

Use the figure below to answer the following questions. Figure 4.3.1 -Refer to Figure 4.3.1.In the figure, the distance between points T and U represents

A bakery uses flour to produce bread.When calculating GDP, we include _______ because when we add the value of the flour to the value of the loaf of bread to calculate GDP, the result is _______.

Use the table below to answer the following questions. Table 4.2.6 There are only two goods in this economy. -Refer to Table 4.2.6.What is nominal GDP in the current year?

Table 4.4.4 -Refer to Table 4.4.4.The table provides data on the economy of Tropical Republic that produces only bananas and coconuts.The chained- dollar real GDP in 2018 expressed in 2017 dollars is

What Is Economics

The Economic Problem

Demand and Supply

Monitoring Jobs and Inflation

Economic Growth

Finance, Saving, and Investment

Money, the Price Level, and Inflation

The Exchange Rate and the Balance of Payments

Aggregate Supply and Aggregate Demand

Expenditure Multipliers

The Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

International Trade Policy

Filters

A bakery uses flour to produce bread.When calculating GDP, we include _ because when we add the value of the flour to the value of the loaf of bread to calculate GDP, the result is _.