Question 1

Which of the following statements is true?

Accepted Answer

A) Final goods and services produced in Canada by foreigners are part of the foreign country's GDP. 
B) Final goods and services produced in Canada by foreigners are imports. 
C) Final goods and services produced in Canada by foreigners are exports. 
D) Final goods and services produced abroad by Canadians are part of Canadian GDP. 
E) Final goods and services produced in Canada by foreigners are part of Canada's GDP. 
A) Final goods and services produced in Canada by foreigners are part of the foreign country's GDP. 
B) Final goods and services produced in Canada by foreigners are imports. 
C) Final goods and services produced in Canada by foreigners are exports. 
D) Final goods and services produced abroad by Canadians are part of Canadian GDP. 
E) Final goods and services produced in Canada by foreigners are part of Canada's GDP.

Question 2

Suppose Mail Boxes Etc.buys a new copier for its store for $1,000.A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750.Over the year the copier was used, _______ has occurred.

Accepted Answer

A) demarcation 
B) devaluation 
C) depreciation 
D) disparity 
E) denouement 
A) demarcation 
B) devaluation 
C) depreciation 
D) disparity 
E) denouement

Question 3

In calculating GDP, all of the following are excluded except

Accepted Answer

A) purchases of stocks and bonds. 
B) the value of all homes built in the year but not sold. 
C) the value of intermediate goods. 
D) the value of used goods. 
E) subsidies from the government. 
A) purchases of stocks and bonds. 
B) the value of all homes built in the year but not sold. 
C) the value of intermediate goods. 
D) the value of used goods. 
E) subsidies from the government.

Question 4

Use the table below to answer the following questions.
Table 4.2.4
  
-Refer to Table 4.2.4.Net domestic income at market prices is equal to

Accepted Answer

A) $2,150. 
B) $1,940. 
C) $2,000. 
D) $2,250. 
E) $2,400. 
A) $2,150. 
B) $1,940. 
C) $2,000. 
D) $2,250. 
E) $2,400.

Question 5

The firm that printed your textbook bought the paper from XYZ Paper Mills.This purchase of paper _______ part of GDP because the paper is _______ good.

Accepted Answer

A) is; a nonrenewable 
B) is; a final 
C) is not; an intermediate 
D) is; an intermediate 
E) is not; a final 
A) is; a nonrenewable 
B) is; a final 
C) is not; an intermediate 
D) is; an intermediate 
E) is not; a final

Question 6

A hypothetical economy produced four final goods during the year: plates, TVs, bicycles, and computers.Forty plates were produced and sold for $10 each.Five TVs were produced and sold for $300 each.Fifty bicycles were produced and sold for $100 each.Three computers were produced and sold for $750 each.This information can be used to determine

Accepted Answer

A) indirect taxes less subsidies. 
B) total income. 
C) net investment. 
D) gross investment. 
E) whether factors are fully employed. 
A) indirect taxes less subsidies. 
B) total income. 
C) net investment. 
D) gross investment. 
E) whether factors are fully employed.

Question 7

Choose the correct statement.

Accepted Answer

A) Nominal GDP is just a more precise name for GDP. 
B) Nominal GDP is just a more precise name for real GDP. 
C) When nominal GDP increases, real GDP decreases. 
D) Nominal GDP and real GDP both increase when the average level of prices increases. 
E) We measure the change in production by comparing nominal GDP in one year with real GDP in the previous year. 
A) Nominal GDP is just a more precise name for GDP. 
B) Nominal GDP is just a more precise name for real GDP. 
C) When nominal GDP increases, real GDP decreases. 
D) Nominal GDP and real GDP both increase when the average level of prices increases. 
E) We measure the change in production by comparing nominal GDP in one year with real GDP in the previous year.

Question 8

Which of the following is not correct?

Accepted Answer

A) Gross investment is the amount by which the value of capital increases. 
B) Investment is the purchase of new plant, equipment, and buildings and the additions to inventories. 
C) Gross investment is the total amount spent buying new capital and replacing depreciated capital. 
D) Depreciation decreases the value of a firm's capital. 
E) Net investment equals gross investment minus depreciation. 
A) Gross investment is the amount by which the value of capital increases. 
B) Investment is the purchase of new plant, equipment, and buildings and the additions to inventories. 
C) Gross investment is the total amount spent buying new capital and replacing depreciated capital. 
D) Depreciation decreases the value of a firm's capital. 
E) Net investment equals gross investment minus depreciation.

Question 9

At 2017 prices, the value of production in 2018 was 2 percentage points higher than in 2017.At 2018 prices, the value of production in 2018 was 4 percentage points higher than in 2017.The chained- dollar real GDP is _______ in 2018 than in 2017.

Accepted Answer

A) 2 percent smaller 
B) 3 percent greater 
C) 3 percent smaller 
D) 4 percent greater 
E) 2 percent greater 
A) 2 percent smaller 
B) 3 percent greater 
C) 3 percent smaller 
D) 4 percent greater 
E) 2 percent greater

Question 10

Suppose the economy's capital increases over the year.It must be true that

Accepted Answer

A) net investment was greater than gross investment. 
B) net investment was positive. 
C) depreciation is less than zero. 
D) depreciation was greater than net investment. 
E) depreciation was greater than gross investment. 
A) net investment was greater than gross investment. 
B) net investment was positive. 
C) depreciation is less than zero. 
D) depreciation was greater than net investment. 
E) depreciation was greater than gross investment.

Question 11

Which one of the following is an expenditure flow from households to firms?

Accepted Answer

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

Question 12

Intermediate goods are

Accepted Answer

A) purchased this year but consumed in future years. 
B) included directly in the measure of GDP. 
C) sold to their ultimate user. 
D) not included in the measure of GDP because they are usually imported. 
E) produced by one firm, bought by another firm, and used as a component of a final good or service. 
A) purchased this year but consumed in future years. 
B) included directly in the measure of GDP. 
C) sold to their ultimate user. 
D) not included in the measure of GDP because they are usually imported. 
E) produced by one firm, bought by another firm, and used as a component of a final good or service.

Question 13

The maximum quantity of real GDP that can be produced while avoiding shortages of labour, capital, land, and entrepreneurial ability that would bring rising inflation is

Accepted Answer

A) potential GDP. 
B) real GDP. 
C) nominal GDP. 
D) productive GDP. 
E) actual GDP. 
A) potential GDP. 
B) real GDP. 
C) nominal GDP. 
D) productive GDP. 
E) actual GDP.

Question 14

The underground economy is any economic activity that

Accepted Answer

A) is conducted underground. 
B) is hidden to avoid taxes and regulations because it is illegal. 
C) has negative social value. 
D) is not taxed. 
E) produces intermediate goods or services. 
A) is conducted underground. 
B) is hidden to avoid taxes and regulations because it is illegal. 
C) has negative social value. 
D) is not taxed. 
E) produces intermediate goods or services.

Question 15

Use the information below to answer the following questions.
Fact 4.1.2
Classify each of the following items as a final good or an intermediate good, and identify which is a component of consumptio expenditure, investment, or government expenditure on goods and services:
Item 1.A DVD bought by a household Item 2.A new airplane bought by WestJet Item 3.Aluminum sheets bought by Boeing
Item 4.A new limousine for the prime minister
-Refer to Fact 4.1.2.Item 3 is _______ and item 4 is _______.

Accepted Answer

A) a final good that is investment; a final good that is government expenditure 
B) an intermediate good; a final good that is government expenditure 
C) an intermediate good; a final good that is investment 
D) a final good that is investment; a final good that is investment 
E) a final good that is investment; an intermediate good 
A) a final good that is investment; a final good that is government expenditure 
B) an intermediate good; a final good that is government expenditure 
C) an intermediate good; a final good that is investment 
D) a final good that is investment; a final good that is investment 
E) a final good that is investment; an intermediate good

Question 16

Net domestic income at market prices equals

Accepted Answer

A) all incomes minus depreciation. 
B) indirect business taxes plus personal income plus net exports. 
C) consumption expenditure plus government expenditure plus net exports plus investment. 
D) all incomes plus indirect taxes minus subsidies. 
E) consumption expenditure plus government expenditure plus exports plus personal taxes. 
A) all incomes minus depreciation. 
B) indirect business taxes plus personal income plus net exports. 
C) consumption expenditure plus government expenditure plus net exports plus investment. 
D) all incomes plus indirect taxes minus subsidies. 
E) consumption expenditure plus government expenditure plus exports plus personal taxes.

Question 17

Use the table below to answer the following questions.
Table 4.2.3
  
-Refer to Table 4.2.3.GDP equals

Accepted Answer

A) $1,000,000. 
B) $1,200,000. 
C) $1,300,000. 
D) $850,000. 
E) $1,250,000. 
A) $1,000,000. 
B) $1,200,000. 
C) $1,300,000. 
D) $850,000. 
E) $1,250,000.

Question 18

Real GDP

Accepted Answer

A) fluctuates around potential GDP. 
B) fluctuates from year to year but is always below potential GDP. 
C) equals potential GDP in the base year. 
D) grows at a constant 3 percent per year. 
E) equals potential GDP when the price level is constant. 
A) fluctuates around potential GDP. 
B) fluctuates from year to year but is always below potential GDP. 
C) equals potential GDP in the base year. 
D) grows at a constant 3 percent per year. 
E) equals potential GDP when the price level is constant.

Question 19

Capital in year 2018 equals capital in year 2017

Accepted Answer

A) plus gross investment. 
B) plus net investment. 
C) minus depreciation. 
D) plus net investment plus depreciation. 
E) plus net investment minus depreciation. 
A) plus gross investment. 
B) plus net investment. 
C) minus depreciation. 
D) plus net investment plus depreciation. 
E) plus net investment minus depreciation.

Question 20

Use the table below to answer the following questions.
Table 4.2.4
  
-Refer to Table 4.2.4.Gross investment is equal to

Accepted Answer

A) $460. 
B) $400. 
C) $610. 
D) $690. 
E) $250. 
A) $460. 
B) $400. 
C) $610. 
D) $690. 
E) $250.

Which of the following statements is true?

Suppose Mail Boxes Etc.buys a new copier for its store for $1,000.A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750.Over the year the copier was used, _______ has occurred.

In calculating GDP, all of the following are excluded except

Use the table below to answer the following questions. Table 4.2.4 -Refer to Table 4.2.4.Net domestic income at market prices is equal to

The firm that printed your textbook bought the paper from XYZ Paper Mills.This purchase of paper _ part of GDP because the paper is _ good.

Choose the correct statement.

Which of the following is not correct?

At 2017 prices, the value of production in 2018 was 2 percentage points higher than in 2017.At 2018 prices, the value of production in 2018 was 4 percentage points higher than in 2017.The chained- dollar real GDP is _______ in 2018 than in 2017.

Suppose the economy's capital increases over the year.It must be true that

Which one of the following is an expenditure flow from households to firms?

Intermediate goods are

The maximum quantity of real GDP that can be produced while avoiding shortages of labour, capital, land, and entrepreneurial ability that would bring rising inflation is

The underground economy is any economic activity that

Net domestic income at market prices equals

Use the table below to answer the following questions. Table 4.2.3 -Refer to Table 4.2.3.GDP equals

Real GDP

Capital in year 2018 equals capital in year 2017

Use the table below to answer the following questions. Table 4.2.4 -Refer to Table 4.2.4.Gross investment is equal to

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

Which of the following statements is true?

Suppose Mail Boxes Etc.buys a new copier for its store for $1,000.A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750.Over the year the copier was used, _______ has occurred.

In calculating GDP, all of the following are excluded except

Use the table below to answer the following questions. Table 4.2.4 -Refer to Table 4.2.4.Net domestic income at market prices is equal to

The firm that printed your textbook bought the paper from XYZ Paper Mills.This purchase of paper _______ part of GDP because the paper is _______ good.

Choose the correct statement.

Which of the following is not correct?

At 2017 prices, the value of production in 2018 was 2 percentage points higher than in 2017.At 2018 prices, the value of production in 2018 was 4 percentage points higher than in 2017.The chained- dollar real GDP is _______ in 2018 than in 2017.

Suppose the economy's capital increases over the year.It must be true that

Which one of the following is an expenditure flow from households to firms?

Intermediate goods are

The maximum quantity of real GDP that can be produced while avoiding shortages of labour, capital, land, and entrepreneurial ability that would bring rising inflation is

The underground economy is any economic activity that

Net domestic income at market prices equals

Use the table below to answer the following questions. Table 4.2.3 -Refer to Table 4.2.3.GDP equals

Real GDP

Capital in year 2018 equals capital in year 2017

Use the table below to answer the following questions. Table 4.2.4 -Refer to Table 4.2.4.Gross investment is equal to

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

The firm that printed your textbook bought the paper from XYZ Paper Mills.This purchase of paper _ part of GDP because the paper is _ good.