Question 1

In the circular flow model,

Accepted Answer

A) households are sellers of factor services in goods markets. 
B) households are buyers of goods and services in the factor markets. 
C) firms are sellers of the factors in factor markets. 
D) firms are sellers of goods and services in goods markets. 
E) firms are buyers of goods and services in final markets. 
A) households are sellers of factor services in goods markets. 
B) households are buyers of goods and services in the factor markets. 
C) firms are sellers of the factors in factor markets. 
D) firms are sellers of goods and services in goods markets. 
E) firms are buyers of goods and services in final markets. D

Question 2

Use the table below to answer the following questions.
Table 20.2.3
  
-Refer to Table 20.2.3.Consider the economy represented in the table.Total income,in millions of dollars,is

Accepted Answer

A) $800,000. 
B) $850,000. 
C) $1,350,000. 
D) $1,050,000. 
E) none of the above. 
A) $800,000. 
B) $850,000. 
C) $1,350,000. 
D) $1,050,000. 
E) none of the above. D

Question 3

Use the table below to answer the following questions.
Table 20.2.1
Data From Eastland
  
-Refer to Table 20.2.1.From the data in the table,what is total income in Eastland?

Accepted Answer

A) $1,120 
B) $1,180 
C) $1,360 
D) $1,420 
E) $1,280 
A) $1,120 
B) $1,180 
C) $1,360 
D) $1,420 
E) $1,280 C

Question 4

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.With this information,one could determine

Accepted Answer

A) gross investment for this economy. 
B) net investment for this economy. 
C) indirect taxes less subsidies for this economy. 
D) whether factors had been fully employed in this economy. 
E) total income for this economy. 
A) gross investment for this economy. 
B) net investment for this economy. 
C) indirect taxes less subsidies for this economy. 
D) whether factors had been fully employed in this economy. 
E) total income for this economy.

Question 5

Which of the following adds to Canadian GDP?

Accepted Answer

A) I shovel my own driveway. 
B) I sell my used Honda. 
C) The production and sale of flour to a bakery. 
D) The purchase of a CD made in China. 
E) The ice cream I buy from my grocery store. 
A) I shovel my own driveway. 
B) I sell my used Honda. 
C) The production and sale of flour to a bakery. 
D) The purchase of a CD made in China. 
E) The ice cream I buy from my grocery store.

Question 6

Use the table below to answer the following question.
Table 20.4.2
  
-Refer to Table 20.4.2.An economy produces only digital cameras,chocolate bars,and watches.
The table gives the quantities produced and prices in 2010 and 2011.
The base year is 2010.
The chained-dollar real GDP in 2011 is

Accepted Answer

A) $34. 
B) $25. 
C) $147. 
D) $109. 
E) $36. 
A) $34. 
B) $25. 
C) $147. 
D) $109. 
E) $36.

Question 7

Use the table below to answer the following questions.
Table 20.2.4
  
-Refer to Table 20.2.4.Gross investment is equal to

Accepted Answer

A) $460. 
B) $260. 
C) $400. 
D) $560. 
E) $250. 
A) $460. 
B) $260. 
C) $400. 
D) $560. 
E) $250.

Question 8

If nominal GDP increased by 11 percent during a year while real GDP increased by only 5 percent,then the

Accepted Answer

A) price level decreased by 6 percent. 
B) price level increased by 16 percent. 
C) price level remained steady but real output fell by 6 percent. 
D) unemployment rate fell during the year. 
E) price level increased by 6 percent. 
A) price level decreased by 6 percent. 
B) price level increased by 16 percent. 
C) price level remained steady but real output fell by 6 percent. 
D) unemployment rate fell during the year. 
E) price level increased by 6 percent.

Question 9

The sum of wages,salaries and supplementary labour income,and other factor incomes is

Accepted Answer

A) gross domestic product. 
B) gross domestic income. 
C) net domestic income at factor cost. 
D) net domestic product. 
E) total output of the economy. 
A) gross domestic product. 
B) gross domestic income. 
C) net domestic income at factor cost. 
D) net domestic product. 
E) total output of the economy.

Question 10

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

Question 11

Which of the following statements by politicians is talking about the business cycle?

Accepted Answer

A) "Canadian unemployment is falling due to the upturn in the economy." 
B) "Crime rates increase every spring as the school year ends." 
C) "An average of 220,000 new jobs are created each year in Canada." 
D) "More capital investment will create more jobs." 
E) "Business always rises just before Christmas." 
A) "Canadian unemployment is falling due to the upturn in the economy." 
B) "Crime rates increase every spring as the school year ends." 
C) "An average of 220,000 new jobs are created each year in Canada." 
D) "More capital investment will create more jobs." 
E) "Business always rises just before Christmas."

Question 12

A south sea island produces only coconuts.
In 2005,the price of a coconut is $2.00 and the quantity produced is 400.
In 2012,the price of a coconut is $1.50 and the quantity produced is 350.
2005 is the reference base year.
Real GDP in 2012 in terms of base-year prices is

Accepted Answer

A) $600. 
B) $525. 
C) $800. 
D) $700. 
E) $750. 
A) $600. 
B) $525. 
C) $800. 
D) $700. 
E) $750.

Question 13

Why is the Human Development Index thought to be a better measure of economic well-being than real GDP per person?

Accepted Answer

A) It includes a measure of resource depletion. 
B) It ignores health, which is hard to measure. 
C) It includes leisure time and household production. 
D) It includes health and education measures, as well as real GDP per person. 
E) It includes only health and education measures, ignoring real GDP per person. 
A) It includes a measure of resource depletion. 
B) It ignores health, which is hard to measure. 
C) It includes leisure time and household production. 
D) It includes health and education measures, as well as real GDP per person. 
E) It includes only health and education measures, ignoring real GDP per person.

Question 14

Use the table below to answer the following question.
Table 20.4.4
  
-Refer to Table 20.4.4.The table provides data on the economy of Tropical Republic that produces only bananas and coconuts.
Nominal GDP in 2011 is ________.Nominal GDP in 2012 is ________.The chained-dollar real GDP in 2012 expressed in 2011 dollars is ________.

Accepted Answer

A) $7,500;$7,000;$7,472.50 
B) $7,472.50;$7,000;$7,500 
C) $7,000;$7,500;$7,472.50 
D) $7,472.50;$7,500;$7,000 
E) $1,500;$1,625;$1,575 
A) $7,500;$7,000;$7,472.50 
B) $7,472.50;$7,000;$7,500 
C) $7,000;$7,500;$7,472.50 
D) $7,472.50;$7,500;$7,000 
E) $1,500;$1,625;$1,575

Question 15

Which of the following would be an example of a consumption expenditure?

Accepted Answer

A) More spending by the government on children's programs. 
B) An increase in welfare payments to single mothers. 
C) The purchase of a new car by the IPSCO steel company. 
D) The purchase of a new car by the Singh household. 
E) All of the above. 
A) More spending by the government on children's programs. 
B) An increase in welfare payments to single mothers. 
C) The purchase of a new car by the IPSCO steel company. 
D) The purchase of a new car by the Singh household. 
E) All of the above.

Question 16

Use the table below to answer the following questions.
Table 20.2.5
Data From Southton
  
-Refer to Table 20.2.5.From the data in the table,compute Southton's nominal GDP in the base year.

Accepted Answer

A) $208 
B) $197 
C) $209 
D) $226 
E) It cannot be calculated given the data. 
A) $208 
B) $197 
C) $209 
D) $226 
E) It cannot be calculated given the data.

Question 17

In the National Income and Expenditure Accounts,government expenditure refers to spending on goods and services by

Accepted Answer

A) federal and provincial governments only. 
B) the federal government only.Provincial and local government expenditures are included in provincial GDP calculations. 
C) provincial and local governments only. 
D) federal, provincial, and local governments. 
E) the federal government and local governments only.Provincial government expenditures are included in provincial GDP calculations. 
A) federal and provincial governments only. 
B) the federal government only.Provincial and local government expenditures are included in provincial GDP calculations. 
C) provincial and local governments only. 
D) federal, provincial, and local governments. 
E) the federal government and local governments only.Provincial government expenditures are included in provincial GDP calculations.

Question 18

Use the table below to answer the following questions.
Table 20.4.1
  
-At 2010 prices,the value of production in 2011 was 2 percentage points higher than in 2010. At 2011 prices,the value of production in 2011 was 4 percentage points higher than in 2010. The chained-dollar real GDP is ________ in 2011 than in 2010.

Accepted Answer

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

Question 19

If you want to investigate the claim that more goods and services were produced in the economy during 2011 than 2012,what should you look at?

Accepted Answer

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

Question 20

Use the table below to answer the following questions.
Table 20.2.4
  
-Refer to Table 20.2.4.Net investment is equal to

Accepted Answer

A) $250. 
B) $210. 
C) $510. 
D) $560. 
E) $150. 
A) $250. 
B) $210. 
C) $510. 
D) $560. 
E) $150.

Exam 20: Measuring GDP and Economic Growth

In the circular flow model,

Use the table below to answer the following questions. Table 20.2.3 -Refer to Table 20.2.3.Consider the economy represented in the table.Total income,in millions of dollars,is

Use the table below to answer the following questions. Table 20.2.1 Data From Eastland -Refer to Table 20.2.1.From the data in the table,what is total income in Eastland?

Which of the following adds to Canadian GDP?

Use the table below to answer the following question. Table 20.4.2 -Refer to Table 20.4.2.An economy produces only digital cameras,chocolate bars,and watches. The table gives the quantities produced and prices in 2010 and 2011. The base year is 2010. The chained-dollar real GDP in 2011 is

Use the table below to answer the following questions. Table 20.2.4 -Refer to Table 20.2.4.Gross investment is equal to

If nominal GDP increased by 11 percent during a year while real GDP increased by only 5 percent,then the

The sum of wages,salaries and supplementary labour income,and other factor incomes is

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.

Which of the following statements by politicians is talking about the business cycle?

A south sea island produces only coconuts. In 2005,the price of a coconut is $2.00 and the quantity produced is 400. In 2012,the price of a coconut is $1.50 and the quantity produced is 350. 2005 is the reference base year. Real GDP in 2012 in terms of base-year prices is

Why is the Human Development Index thought to be a better measure of economic well-being than real GDP per person?

Which of the following would be an example of a consumption expenditure?

Use the table below to answer the following questions. Table 20.2.5 Data From Southton -Refer to Table 20.2.5.From the data in the table,compute Southton's nominal GDP in the base year.

In the National Income and Expenditure Accounts,government expenditure refers to spending on goods and services by

If you want to investigate the claim that more goods and services were produced in the economy during 2011 than 2012,what should you look at?

Use the table below to answer the following questions. Table 20.2.4 -Refer to Table 20.2.4.Net investment is equal to

What Is Economics?

The Economic Problem

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Expenditure Multipliers: The Keynesian Model

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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.