Question 1

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 2

The change in capital from year to year is equal to

Accepted Answer

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

Question 3

Use the information below to answer the following questions.
Fact 20.1.1
At the beginning of 2012, Peter's Perfectly Prickly Piercing Parlour had $5,000 worth of bellybutton and eyebrow rings on hand, 2 computers (each worth $1,000), 1 cash register worth $100, electrical equipment worth $500, and one piercing needle worth $500.At the end of 2012, they had $5,000 worth of bellybutton and eyebrow rings, a new high speed computer worth $3,000 (they had to throw 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 20.1.1.Peter's net investment in 2012 is

Accepted Answer

A) $2,000. 
B) $3,800. 
C) $1,800. 
D) $7,800. 
E) $1,500. 
A) $2,000. 
B) $3,800. 
C) $1,800. 
D) $7,800. 
E) $1,500.

Question 4

What we produce during our working time is ________ as part of GDP and the enjoyment we gain from our leisure time is ________ as part of GDP.

Accepted Answer

A) included;included 
B) not included;not included 
C) included;not included 
D) not included;included 
E) included;sometimes but not always included 
A) included;included 
B) not included;not included 
C) included;not included 
D) not included;included 
E) included;sometimes but not always included

Question 5

The four parts of the business cycle occur in the following order:

Accepted Answer

A) recession, trough, peak, expansion. 
B) expansion, trough, peak, recession. 
C) recession, trough, expansion, peak. 
D) expansion, trough, recession, peak. 
E) trough, peak, expansion, recession. 
A) recession, trough, peak, expansion. 
B) expansion, trough, peak, recession. 
C) recession, trough, expansion, peak. 
D) expansion, trough, recession, peak. 
E) trough, peak, expansion, recession.

Question 6

Which one of the following is false?

Accepted Answer

A) Y = C + I + G + M - X 
B) Y - C - I - G - X + M = 0 
C) X - M = Y - C - I - G 
D) Y + M = C + I + G + X 
E) Y = C + I + G + X - M 
A) Y = C + I + G + M - X 
B) Y - C - I - G - X + M = 0 
C) X - M = Y - C - I - G 
D) Y + M = C + I + G + X 
E) Y = C + I + G + X - M

Question 7

Use the table below to answer the following questions.
Table 20.4.1
  
-The reference base year is 2011. To calculate the chained-dollar real GDP in 2012 we calculate

Accepted Answer

A) the value of the final goods and services produced in 2012 valued at the prices that prevailed in 2012. 
B) the value of the final goods and services produced in 2012 valued at the prices that prevailed in the base year. 
C) nominal GDP in 2012 multiplied by price level. 
D) the value of final goods and services produced in the base year valued at the 2012 prices. 
E) the base-year GDP and add the average of the increases in real GDP calculated using 2011 prices and 2012 prices. 
A) the value of the final goods and services produced in 2012 valued at the prices that prevailed in 2012. 
B) the value of the final goods and services produced in 2012 valued at the prices that prevailed in the base year. 
C) nominal GDP in 2012 multiplied by price level. 
D) the value of final goods and services produced in the base year valued at the 2012 prices. 
E) the base-year GDP and add the average of the increases in real GDP calculated using 2011 prices and 2012 prices.

Question 8

Use the table below to answer the following questions.
Table 20.2.2
  
-Refer to Table 20.2.2.Gross domestic product equals

Accepted Answer

A) $3,050. 
B) $3,150. 
C) $3,400. 
D) $5,600. 
E) $5,050. 
A) $3,050. 
B) $3,150. 
C) $3,400. 
D) $5,600. 
E) $5,050.

Question 9

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

Accepted Answer

A) $2,400. 
B) $1,920. 
C) $2,150. 
D) $1,940. 
E) $2,350. 
A) $2,400. 
B) $1,920. 
C) $2,150. 
D) $1,940. 
E) $2,350.

Question 10

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

Accepted Answer

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

Question 11

The purchasers in the goods markets are

Accepted Answer

A) households and government only. 
B) households and firms only. 
C) households and net exporters only. 
D) households, firms, and government only. 
E) households, firms, government, and those who import our goods. 
A) households and government only. 
B) households and firms only. 
C) households and net exporters only. 
D) households, firms, and government only. 
E) households, firms, government, and those who import our goods.

Question 12

Use the figure below to answer the following questions.
   
Figure 20.1.1
-Refer to Figure 20.1.1,which shows the circular flow of expenditure and income for Venus.During 2012,A was $100,B was $50,C was $30 and D was $10.What is aggregate income?

Accepted Answer

A) $25 
B) $50 
C) $75 
D) $90 
E) $100 
A) $25 
B) $50 
C) $75 
D) $90 
E) $100

Question 13

Use the figure below to answer the following questions.
   
Figure 20.3.1
-Refer to Figure 20.3.1.In the figure,the distance between points S and T represents

Accepted Answer

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

Question 14

The largest component of GDP using the expenditure approach is

Accepted Answer

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

Question 15

Use the table below to answer the following questions.
Table 20.4.1
  
-Refer to Table 20.4.1.Chained-dollar real GDP in 2012 is

Accepted Answer

A) $1665. 
B) $1950.5. 
C) $1707.75. 
D) $1250. 
E) $1100. 
A) $1665. 
B) $1950.5. 
C) $1707.75. 
D) $1250. 
E) $1100.

Question 16

How much would the production of a kayak add to GDP if the shell costs $250,the paint costs $20,the finisher costs $35,the manufacturer sold it to the dealer for $500,and the dealer sold it to his customer for $800?

Accepted Answer

A) $1,605 
B) $1,300 
C) $500 
D) $305 
E) $800 
A) $1,605 
B) $1,300 
C) $500 
D) $305 
E) $800

Question 17

Use the information below to answer the following questions.
Fact 20.1.1
At the beginning of 2012, Peter's Perfectly Prickly Piercing Parlour had $5,000 worth of bellybutton and eyebrow rings on hand, 2 computers (each worth $1,000), 1 cash register worth $100, electrical equipment worth $500, and one piercing needle worth $500.At the end of 2012, they had $5,000 worth of bellybutton and eyebrow rings, a new high speed computer worth $3,000 (they had to throw 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 20.1.1.Peter's depreciation in 2012 is

Accepted Answer

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

Question 18

To measure GDP,Statistics Canada uses

Accepted Answer

A) the expenditure approach. 
B) the income approach. 
C) the value-added approach. 
D) only A and B. 
E) A, B and C. 
A) the expenditure approach. 
B) the income approach. 
C) the value-added approach. 
D) only A and B. 
E) A, B and C.

Question 19

The underground economy is any economic activity that

Accepted Answer

A) produces intermediate goods or services. 
B) is not taxed. 
C) is unreported or illegal. 
D) has negative social value. 
E) is conducted underground. 
A) produces intermediate goods or services. 
B) is not taxed. 
C) is unreported or illegal. 
D) has negative social value. 
E) is conducted underground.

Question 20

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 additional data are needed to compute net domestic income at market prices?

Accepted Answer

A) statistical discrepancy 
B) transfer payments 
C) subsidies 
D) depreciation 
E) net taxes 
A) statistical discrepancy 
B) transfer payments 
C) subsidies 
D) depreciation 
E) net taxes

Exam 20: Measuring GDP and Economic Growth

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

The change in capital from year to year is equal to

What we produce during our working time is ________ as part of GDP and the enjoyment we gain from our leisure time is ________ as part of GDP.

The four parts of the business cycle occur in the following order:

Which one of the following is false?

Use the table below to answer the following questions. Table 20.4.1 -The reference base year is 2011. To calculate the chained-dollar real GDP in 2012 we calculate

Use the table below to answer the following questions. Table 20.2.2 -Refer to Table 20.2.2.Gross domestic product equals

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

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

The purchasers in the goods markets are

Use the figure below to answer the following questions. Figure 20.1.1 -Refer to Figure 20.1.1,which shows the circular flow of expenditure and income for Venus.During 2012,A was $100,B was $50,C was $30 and D was $10.What is aggregate income?

Use the figure below to answer the following questions. Figure 20.3.1 -Refer to Figure 20.3.1.In the figure,the distance between points S and T represents

The largest component of GDP using the expenditure approach is

Use the table below to answer the following questions. Table 20.4.1 -Refer to Table 20.4.1.Chained-dollar real GDP in 2012 is

How much would the production of a kayak add to GDP if the shell costs $250,the paint costs $20,the finisher costs $35,the manufacturer sold it to the dealer for $500,and the dealer sold it to his customer for $800?

To measure GDP,Statistics Canada uses

The underground economy is any economic activity that

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 additional data are needed to compute net domestic income at market prices?

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

What we produce during our working time is as part of GDP and the enjoyment we gain from our leisure time is as part of GDP.