Question 1

Which approach to measuring GDP is being used when Statistics Canada sums wages,salaries and supplementary labour income,and other factor incomes?

Accepted Answer

A) opportunity cost approach 
B) expenditure approach 
C) value-added approach 
D) factor cost approach 
E) income approach 
A) opportunity cost approach 
B) expenditure approach 
C) value-added approach 
D) factor cost approach 
E) income approach

Question 2

Which of the following statements is true?

Accepted Answer

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

Question 3

When we use PPP we can make valid international comparisons of real GDP because we

Accepted Answer

A) calculate the value of goods and services produced in two countries using the same quantities. 
B) use data provided by the IMF. 
C) use the price data provided by the two countries but not the quantities. 
D) calculate the value of goods and services produced in two countries using the same prices. 
E) use official government data. 
A) calculate the value of goods and services produced in two countries using the same quantities. 
B) use data provided by the IMF. 
C) use the price data provided by the two countries but not the quantities. 
D) calculate the value of goods and services produced in two countries using the same prices. 
E) use official government data.

Question 4

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

Question 5

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 real 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 6

In recent history,real GDP has risen less rapidly than nominal GDP.This is because

Accepted Answer

A) the general price level fell. 
B) capital increased. 
C) the goal of zero population growth has been reached. 
D) the general price level rose. 
E) the level of population rose. 
A) the general price level fell. 
B) capital increased. 
C) the goal of zero population growth has been reached. 
D) the general price level rose. 
E) the level of population rose.

Question 7

Which of the following relationships is correct?

Accepted Answer

A) Gross Investment = Net Investment + Depreciation 
B) Consumption expenditure = Net Investment - Depreciation 
C) Net Investment = Gross Investment + Depreciation 
D) Depreciation = Gross Investment - Consumption expenditure 
E) Saving = Gross Investment - Taxes 
A) Gross Investment = Net Investment + Depreciation 
B) Consumption expenditure = Net Investment - Depreciation 
C) Net Investment = Gross Investment + Depreciation 
D) Depreciation = Gross Investment - Consumption expenditure 
E) Saving = Gross Investment - Taxes

Question 8

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.GDP in this economy,in millions of dollars,is

Accepted Answer

A) $1,150,000 
B) $850,000. 
C) $1,350,000. 
D) $1,050,000. 
E) none of the above. 
A) $1,150,000 
B) $850,000. 
C) $1,350,000. 
D) $1,050,000. 
E) none of the above.

Question 9

Intermediate goods are

Accepted Answer

A) sold to their ultimate user. 
B) produced by one firm, bought by another firm, and used as a component of a final good or service. 
C) included directly in the measure of GDP. 
D) capital. 
E) purchased this year but consumed in future years. 
A) sold to their ultimate user. 
B) produced by one firm, bought by another firm, and used as a component of a final good or service. 
C) included directly in the measure of GDP. 
D) capital. 
E) purchased this year but consumed in future years.

Question 10

Gross domestic product is

Accepted Answer

A) the final value of all goods produced in a country in a given time period. 
B) the market value of all goods and services produced in a country during a given time period. 
C) the market value of all the final goods and services produced in a country during a given time period. 
D) the average value of output produced in a country in a given time period. 
E) the market value of all the intermediate goods and services produced in a country during a given time period. 
A) the final value of all goods produced in a country in a given time period. 
B) the market value of all goods and services produced in a country during a given time period. 
C) the market value of all the final goods and services produced in a country during a given time period. 
D) the average value of output produced in a country in a given time period. 
E) the market value of all the intermediate goods and services produced in a country during a given time period.

Question 11

The existence of which one of the following is not a reason for the fact that GDP gives an incorrect estimate of the value of total output in the economy?

Accepted Answer

A) social justice 
B) political freedom 
C) health and life expectancy 
D) taxes 
E) leisure time 
A) social justice 
B) political freedom 
C) health and life expectancy 
D) taxes 
E) leisure time

Question 12

Potential GDP is ________.

Accepted Answer

A) the maximum amount of GDP that can be produced while avoiding shortages of labour, capital, land, and entrepreneurship that would bring rising inflation 
B) the same as real GDP 
C) the same as nominal GDP 
D) equal to real GDP multiplied by the price level 
E) equal to nominal GDP multiplied by the price level 
A) the maximum amount of GDP that can be produced while avoiding shortages of labour, capital, land, and entrepreneurship that would bring rising inflation 
B) the same as real GDP 
C) the same as nominal GDP 
D) equal to real GDP multiplied by the price level 
E) equal to nominal GDP multiplied by the price level

Question 13

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

Accepted Answer

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

Question 14

A recession is a period with

Accepted Answer

A) negative growth rate in real GDP that lasts at least one quarter. 
B) positive growth rate in real GDP that lasts at least one quarter. 
C) positive growth rate in real GDP that lasts at least two quarters. 
D) negative growth rate in real GDP that lasts at least two quarters. 
E) a slowdown in real GDP growth but not necessarily negative real GDP growth. 
A) negative growth rate in real GDP that lasts at least one quarter. 
B) positive growth rate in real GDP that lasts at least one quarter. 
C) positive growth rate in real GDP that lasts at least two quarters. 
D) negative growth rate in real GDP that lasts at least two quarters. 
E) a slowdown in real GDP growth but not necessarily negative real GDP growth.

Question 15

Which one of the following is true?

Accepted Answer

A) Y = C + I + G + M - X 
B) I + G + X = Y + I + M 
C) Y = C + S + I 
D) Y + M = C + I + G 
E) Y = C + I + G + X - M 
A) Y = C + I + G + M - X 
B) I + G + X = Y + I + M 
C) Y = C + S + I 
D) Y + M = C + I + G 
E) Y = C + I + G + X - M

Question 16

Suppose the economy of Econoworld produces only two goods,kayaks and birdseed.In one year 20 kayaks are produced and sold for $1,000 each and 10 bags of birdseed are produced and sold for $30 each.The value of nominal GDP for this year is

Accepted Answer

A) $20,000. 
B) $300. 
C) $20,300. 
D) $23,000. 
E) 20 kayaks plus 10 bags of birdseed. 
A) $20,000. 
B) $300. 
C) $20,300. 
D) $23,000. 
E) 20 kayaks plus 10 bags of birdseed.

Question 17

In comparing Canada and China we find that

Accepted Answer

A) real GDP per person is about the same in the two countries. 
B) Canada's real GDP per person is less than China's real GDP per person once we adjust for currency differences. 
C) China's real GDP per person is less than real GDP per person in Canada. 
D) Canada's real GDP per person is much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used. 
E) none of the above. 
A) real GDP per person is about the same in the two countries. 
B) Canada's real GDP per person is less than China's real GDP per person once we adjust for currency differences. 
C) China's real GDP per person is less than real GDP per person in Canada. 
D) Canada's real GDP per person is much larger than China's real GDP per person when purchasing power parity prices are used but is less than China's real GDP per person when exchange rate prices are used. 
E) none of the above.

Question 18

An art collector recently sold a piece of pottery for $300.He had purchased it for $200 two years earlier.How will the most recent sale affect GDP?

Accepted Answer

A) GDP will increase by $100. 
B) GDP will not change. 
C) GDP will increase by $300. 
D) GDP will increase by $200. 
E) GDP 2 years ago must be adjusted downwards by $200, and current GDP will rise by $300. 
A) GDP will increase by $100. 
B) GDP will not change. 
C) GDP will increase by $300. 
D) GDP will increase by $200. 
E) GDP 2 years ago must be adjusted downwards by $200, and current GDP will rise by $300.

Question 19

Use the table below to answer the following questions.
Table 20.2.1
Data From Eastland
  
-Refer to Table 20.2.1.From the information given in the table,the value of net domestic income at factor cost is

Accepted Answer

A) $1,280. 
B) $1,290. 
C) $1,360. 
D) $1,060. 
E) $1,100. 
A) $1,280. 
B) $1,290. 
C) $1,360. 
D) $1,060. 
E) $1,100.

Question 20

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

Accepted Answer

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

Exam 20: Measuring GDP and Economic Growth

Which approach to measuring GDP is being used when Statistics Canada sums wages,salaries and supplementary labour income,and other factor incomes?

Which of the following statements is true?

When we use PPP we can make valid international comparisons of real GDP because we

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.

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 real GDP in the base year.

In recent history,real GDP has risen less rapidly than nominal GDP.This is because

Which of the following relationships is correct?

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.GDP in this economy,in millions of dollars,is

Intermediate goods are

Gross domestic product is

The existence of which one of the following is not a reason for the fact that GDP gives an incorrect estimate of the value of total output in the economy?

Potential GDP is ________.

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

A recession is a period with

Which one of the following is true?

Suppose the economy of Econoworld produces only two goods,kayaks and birdseed.In one year 20 kayaks are produced and sold for $1,000 each and 10 bags of birdseed are produced and sold for $30 each.The value of nominal GDP for this year is

In comparing Canada and China we find that

An art collector recently sold a piece of pottery for $300.He had purchased it for $200 two years earlier.How will the most recent sale affect GDP?

Use the table below to answer the following questions. Table 20.2.1 Data From Eastland -Refer to Table 20.2.1.From the information given in the table,the value of net domestic income at factor cost is

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

What Is Economics?

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Government Actions in Markets

Global Markets in Action

Utility and Demand

Possibilities, Preferences, and Choices

Organizing Production

Output and Costs

Perfect Competition

Monopoly

Monopolistic Competition

Oligopoly

Externalities

Public Goods and Common Resources

Markets for Factors of Production

Economic Inequality

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 Keynesian Model

Canadian Inflation, Unemployment, and Business Cycle

Fiscal Policy

Monetary Policy

International Trade Policy

Filters