Question 1

In 1933 net investment was minus $208 million.This meant that:

Accepted Answer

A) gross investment exceeded depreciation by $208 million. 
B) the economy was expanding in that year. 
C) the production of 1933's GDP used up more capital goods than were produced in that year. 
D) the economy produced no capital goods at all in 1933. 
A) gross investment exceeded depreciation by $208 million. 
B) the economy was expanding in that year. 
C) the production of 1933's GDP used up more capital goods than were produced in that year. 
D) the economy produced no capital goods at all in 1933.

Question 2

Refer to the data below.Personal income: All figures are in billions of dollars.

Accepted Answer

A) is $229. 
B) is $253. 
C) is $274. 
D) is $243. 
A) is $229. 
B) is $253. 
C) is $274. 
D) is $243.

Question 3

A price index is 100 times the ratio of real GDP to nominal GDP.

Accepted Answer

A) True 
 B)False

Question 4

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.The nominal GDP for year 3 is:

Accepted Answer

A) 125 percent higher than the nominal GDP for year 1. 
B) 50 percent higher than the nominal GDP for year 1. 
C) 120 
D) 30 
A) 125 percent higher than the nominal GDP for year 1. 
B) 50 percent higher than the nominal GDP for year 1. 
C) 120 
D) 30

Question 5

National income accountants can avoid multiple counting by:

Accepted Answer

A) including transfers in their calculations. 
B) counting both intermediate and final goods. 
C) only counting final goods. 
D) only counting intermediate goods. 
A) including transfers in their calculations. 
B) counting both intermediate and final goods. 
C) only counting final goods. 
D) only counting intermediate goods.

Question 6

If all the final goods and intermediate goods and services were included in GDP:

Accepted Answer

A) the GDP would then have to be deflated for changes in the price level. 
B) nominal GDP would exceed real GDP. 
C) the GDP would be overstated. 
D) the GDP would be understated. 
A) the GDP would then have to be deflated for changes in the price level. 
B) nominal GDP would exceed real GDP. 
C) the GDP would be overstated. 
D) the GDP would be understated.

Question 7

The smallest component of aggregate spending in Canada is:

Accepted Answer

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

Question 8

If depreciation exceeds gross investment:

Accepted Answer

A) the economy's stock of capital may be either growing or shrinking. 
B) the economy's stock of capital is shrinking. 
C) the economy's stock of capital is growing. 
D) net investment is zero. 
A) the economy's stock of capital may be either growing or shrinking. 
B) the economy's stock of capital is shrinking. 
C) the economy's stock of capital is growing. 
D) net investment is zero.

Question 9

Which of the following is the first step for deriving real GDP from nominal GDP?

Accepted Answer

A) Finding nominal GDP for each year 
B) Finding real GDP for each year 
C) Computing a price index 
D) Dividing each year's nominal GDP by the price year's price index 
A) Finding nominal GDP for each year 
B) Finding real GDP for each year 
C) Computing a price index 
D) Dividing each year's nominal GDP by the price year's price index

Question 10

Based on Canada's 2017 GDP calculation (using the expenditure approach), what areas contributed the most toward Canada's GDP (calculation based on the expenditure approach) in 2017?

Accepted Answer

A) Personal consumption expenditure 
B) Gross investment expenditure 
C) Government purchases of goods and services 
D) Net exports 
A) Personal consumption expenditure 
B) Gross investment expenditure 
C) Government purchases of goods and services 
D) Net exports

Question 11

In an economy, the value of inventories fell from $75 billion in 2012 to $63 billion in 2013.In calculating the total investment for 2013, national income accountants would:

Accepted Answer

A) decrease it by $75 billion. 
B) increase it by $63 billion. 
C) decrease it by $12 billion. 
D) increase it by $138 billion. 
A) decrease it by $75 billion. 
B) increase it by $63 billion. 
C) decrease it by $12 billion. 
D) increase it by $138 billion.

Question 12

Refer to the above information.Negative net investment is occurring in:

Accepted Answer

A) economy A only. 
B) economy B only. 
C) economy C only. 
D) economies A and B only. 
A) economy A only. 
B) economy B only. 
C) economy C only. 
D) economies A and B only.

Question 13

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

Accepted Answer

A) improvements in product quality over time. 
B) expenditures undertaken to correct pollution. 
C) illegal activities of individuals and businesses. 
D) nonmarket activities, such as the productive work of homemakers. 
A) improvements in product quality over time. 
B) expenditures undertaken to correct pollution. 
C) illegal activities of individuals and businesses. 
D) nonmarket activities, such as the productive work of homemakers.

Question 14

Net exports are a negative number when:

Accepted Answer

A) a nation's imports of goods and services fall. 
B) a nation's imports of goods and services rise. 
C) a nation's exports of goods and services are greater than its imports. 
D) a nation's imports of goods and services are greater than its exports. 
A) a nation's imports of goods and services fall. 
B) a nation's imports of goods and services rise. 
C) a nation's exports of goods and services are greater than its imports. 
D) a nation's imports of goods and services are greater than its exports.

Question 15

(GDP figures are in billions of dollars.)   ]
Refer to the above table.What is the GDP price index in Year 1?

Accepted Answer

A) 105.2 
B) 108.3 
C) 109.6 
D) 111.5 
A) 105.2 
B) 108.3 
C) 109.6 
D) 111.5

Question 16

In 2001, in calculation of the implicit price index, Statistics Canada switched from fixed based price index method to a chain-weighted index.The main reason for this was:

Accepted Answer

A) to avoid complex calculation of the fixed based price index. 
B) to better represent the weight of each category especially the information technology sector. 
C) to avoid underestimation of the GDP growth, due to the rapid growth in the information technology sector. 
D) to be able to use the relatively constant weights for the items in the GDP year after year. 
A) to avoid complex calculation of the fixed based price index. 
B) to better represent the weight of each category especially the information technology sector. 
C) to avoid underestimation of the GDP growth, due to the rapid growth in the information technology sector. 
D) to be able to use the relatively constant weights for the items in the GDP year after year.

Question 17

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) 175 
B) 57 
C) 160 
D) 280

Question 18

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, real GDP in year 5 is:

Accepted Answer

A) $120 
B) $90 
C) $60 
D) $30 
A) $120 
B) $90 
C) $60 
D) $30

Question 19

Which is included in GDP?

Accepted Answer

A) used autos purchased by consumers 
B) transfer payments 
C) telephone service for a home 
D) bread for a restaurant 
A) used autos purchased by consumers 
B) transfer payments 
C) telephone service for a home 
D) bread for a restaurant

Question 20

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.Nominal GDP in the current year is:

Accepted Answer

A) $110 
B) $115 
C) $45 
D) $90 
A) $110 
B) $115 
C) $45 
D) $90

Exam 7: B: Measuring the Economys Output

In 1933 net investment was minus $208 million.This meant that:

Refer to the data below.Personal income: All figures are in billions of dollars.

A price index is 100 times the ratio of real GDP to nominal GDP.

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.The nominal GDP for year 3 is:

National income accountants can avoid multiple counting by:

If all the final goods and intermediate goods and services were included in GDP:

The smallest component of aggregate spending in Canada is:

If depreciation exceeds gross investment:

Which of the following is the first step for deriving real GDP from nominal GDP?

Based on Canada's 2017 GDP calculation (using the expenditure approach), what areas contributed the most toward Canada's GDP (calculation based on the expenditure approach) in 2017?

In an economy, the value of inventories fell from $75 billion in 2012 to $63 billion in 2013.In calculating the total investment for 2013, national income accountants would:

Refer to the above information.Negative net investment is occurring in:

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

Net exports are a negative number when:

(GDP figures are in billions of dollars.) ] Refer to the above table.What is the GDP price index in Year 1?

In 2001, in calculation of the implicit price index, Statistics Canada switched from fixed based price index method to a chain-weighted index.The main reason for this was:

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

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, real GDP in year 5 is:

Which is included in GDP?

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.Nominal GDP in the current year is:

B: Limits, Alternatives, and Choices

A: - Limits, Alternatives, and Choices

B: The Market System and the Circular Flow

A: - The Market System and the Circular Flow

B: Demand, Supply, and Market Equilibrium

A: - Demand, Supply, and Market Equilibrium

B: Market Failures: Public Goods and Externalities

A: - Market Failures: Public Goods and Externalities

B: Governments Role and Government Failure

A: Governments Role and Government Failure

B: an Introduction to Macroeconomics

A: an Introduction to Macroeconomics

A: Measuring the Economys Output

B: Economic Growth

A: Economic Growth

B: Business Cycles, Unemployment, and Inflation

A: Business Cycles, Unemployment, and Inflation

B: Basic Macroeconomic Relationships

A: Basic Macroeconomic Relationships

B: The Aggregate Expenditures Model

A: The Aggregate Expenditures Model

B: Aggregate Demand and Aggregate Supply

A: Aggregate Demand and Aggregate Supply

B: Fiscal Policy, Deficits, Surpluses, and Debt

A: Fiscal Policy, Deficits, Surpluses, and Debt

B: Money, Banking, and Money Creation

A: Money, Banking, and Money Creation

B: Interest Rates and Monetary Policy

A: Interest Rates and Monetary Policy

C: Financial Economics

A: Long-Run Macroeconomic Adjustments

B: Long-Run Macroeconomic Adjustments

A: International Trade

B: International Trade

A: The Balance of Payments and Exchange Rates

B: The Balance of Payments and Exchange Rates

The Economics of Developing Countries

Filters