Question 1

Use the table below to answer the following questions.
Table 20.4.1
  
-Refer to Table 20.4.1. Calculating chained-dollar real GDP, real GDP in 2014 increased by

Accepted Answer

A) 56 percent. 
B) 55.25 percent. 
C) 54.5 percent. 
D) 30 percent. 
E) 75 percent. 
A) 56 percent. 
B) 55.25 percent. 
C) 54.5 percent. 
D) 30 percent. 
E) 75 percent.

Question 2

Use the table below to answer the following questions.
Table 20.2.2
  
-Refer to Table 20.2.2. Net domestic income at market prices equals

Accepted Answer

A) $3,050. 
B) $3,150. 
C) $3,400. 
D) $4,650. 
E) $2,650. 
A) $3,050. 
B) $3,150. 
C) $3,400. 
D) $4,650. 
E) $2,650.

Question 3

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 is unaffected. 
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 is unaffected. 
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 4

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) spending on protection services for the prime minister 
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) spending on protection services for the prime minister

Question 5

All of the following statements are true except

Accepted Answer

A) the Lucas wedge is the dollar value of the accumulated gap between what real GDP per person would have been if the 1960s growth rate had persisted and what real GDP per person turned out to be. 
B) the Lucas wedge accumulated to $640,000 per person by 2013. 
C) the Lucas wedge equals real GDP minus potential GDP. 
D) the Lucas wedge arises from the slowdown of productivity growth that began during the 1970s. 
E) real GDP per person was $45,000 per year lower in 2013 than it would have been with no growth slowdown. 
A) the Lucas wedge is the dollar value of the accumulated gap between what real GDP per person would have been if the 1960s growth rate had persisted and what real GDP per person turned out to be. 
B) the Lucas wedge accumulated to $640,000 per person by 2013. 
C) the Lucas wedge equals real GDP minus potential GDP. 
D) the Lucas wedge arises from the slowdown of productivity growth that began during the 1970s. 
E) real GDP per person was $45,000 per year lower in 2013 than it would have been with no growth slowdown.

Question 6

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 7

Use the figure below to answer the following questions.
   
Figure 20.3.2
-Refer to Figure 20.3.2. In the figure, a recession begins at point ________ and an expansion begins at point ________.

Accepted Answer

A) A; B 
B) B; C 
C) B; A 
D) D; C 
E) C; D 
A) A; B 
B) B; C 
C) B; A 
D) D; C 
E) C; D

Question 8

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 2014, A was $100, B was $50, C was $30 and D was $10. How much is aggregate expenditure?

Accepted Answer

A) $50 
B) $75 
C) $90 
D) $100 
E) $30 
A) $50 
B) $75 
C) $90 
D) $100 
E) $30

Question 9

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 10

Which of the following would not be included in GDP for 2014?

Accepted Answer

A) a car produced in 2014 and held in inventory until 2015 
B) a car produced in 2014 and sold in 2015 
C) the value of all cars produced in 2015 
D) a car produced in January of 2014 and sold in November of 2015 
E) a car produced in 2013 and sold in 2014 
A) a car produced in 2014 and held in inventory until 2015 
B) a car produced in 2014 and sold in 2015 
C) the value of all cars produced in 2015 
D) a car produced in January of 2014 and sold in November of 2015 
E) a car produced in 2013 and sold in 2014

Question 11

Use the information below to answer the following questions.
Fact 20.1.3
The components and robots for Toyota auto assembly lines in Canada are built in Japan. Toyota assembles cars for the Canadian market in Ontario.
-Refer to Fact 20.1.3. Choose the statement that is incorrect.

Accepted Answer

A) Expenditure on the cars is part of consumption expenditure in calculating Canada's GDP. 
B) Expenditure made by Toyota on building the assembly plant in Ontario is recorded as investment. 
C) If any parts for the cars come from Japan, they are Canadian imports. 
D) If any parts for the cars come from Japan, they are recorded as a positive entry in calculating Canada's GDP. 
E) The assembly line components and robots appear as exports in Japan's GDP. 
A) Expenditure on the cars is part of consumption expenditure in calculating Canada's GDP. 
B) Expenditure made by Toyota on building the assembly plant in Ontario is recorded as investment. 
C) If any parts for the cars come from Japan, they are Canadian imports. 
D) If any parts for the cars come from Japan, they are recorded as a positive entry in calculating Canada's GDP. 
E) The assembly line components and robots appear as exports in Japan's GDP.

Question 12

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

Question 13

Use the table below to answer the following questions.
Table 20.4.1
  
-Refer to Table 20.4.1. Chained-dollar real GDP in 2014 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 14

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 15

Use the table below to answer the following questions.
Table 20.2.6
There are only two goods in this economy.
  
-Refer to Table 20.2.6. Consider the data in this table. What is current real GDP in terms of base-year prices?

Accepted Answer

A) $189,900 
B) $192,000 
C) $95,000 
D) $93,000 
E) 75,000 loaves of bread and 25,000 computer disks 
A) $189,900 
B) $192,000 
C) $95,000 
D) $93,000 
E) 75,000 loaves of bread and 25,000 computer disks

Question 16

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 17

In any year, real GDP

Accepted Answer

A) must always be less than potential GDP. 
B) might be greater than, less than, or equal to potential GDP. 
C) will always be greater than potential GDP because of the tendency of nations to incur inflation. 
D) always equals potential GDP. 
E) increases if potential GDP increases, and decreases if potential GDP decreases. 
A) must always be less than potential GDP. 
B) might be greater than, less than, or equal to potential GDP. 
C) will always be greater than potential GDP because of the tendency of nations to incur inflation. 
D) always equals potential GDP. 
E) increases if potential GDP increases, and decreases if potential GDP decreases.

Question 18

For the aggregate economy, income equals

Accepted Answer

A) expenditure, but these are not generally equal to GDP. 
B) GDP, but expenditure is generally less than these. 
C) expenditure equals GDP. 
D) expenditure equals GDP only if there is no government or foreign sectors. 
E) expenditure equals GDP only if there is no depreciation. 
A) expenditure, but these are not generally equal to GDP. 
B) GDP, but expenditure is generally less than these. 
C) expenditure equals GDP. 
D) expenditure equals GDP only if there is no government or foreign sectors. 
E) expenditure equals GDP only if there is no depreciation.

Question 19

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 20

Real GDP will increase only if the

Accepted Answer

A) average level of prices rises. 
B) quantity of goods and services produced increases. 
C) unemployment rate rises. 
D) employment rate rises. 
E) employment rate falls. 
A) average level of prices rises. 
B) quantity of goods and services produced increases. 
C) unemployment rate rises. 
D) employment rate rises. 
E) employment rate falls.

Exam 20: Measuring Gdp and Economic Growth

Use the table below to answer the following questions. Table 20.4.1 -Refer to Table 20.4.1. Calculating chained-dollar real GDP, real GDP in 2014 increased by

Use the table below to answer the following questions. Table 20.2.2 -Refer to Table 20.2.2. Net domestic income at market prices equals

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?

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

All of the following statements are true except

The underground economy is any economic activity that

Use the figure below to answer the following questions. Figure 20.3.2 -Refer to Figure 20.3.2. In the figure, a recession begins at point ________ and an expansion begins at point ________.

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 2014, A was $100, B was $50, C was $30 and D was $10. How much is aggregate expenditure?

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

Which of the following would not be included in GDP for 2014?

Use the information below to answer the following questions. Fact 20.1.3 The components and robots for Toyota auto assembly lines in Canada are built in Japan. Toyota assembles cars for the Canadian market in Ontario. -Refer to Fact 20.1.3. Choose the statement that is incorrect.

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?

Use the table below to answer the following questions. Table 20.4.1 -Refer to Table 20.4.1. Chained-dollar real GDP in 2014 is

The change in capital from year to year is equal to

Use the table below to answer the following questions. Table 20.2.6 There are only two goods in this economy. -Refer to Table 20.2.6. Consider the data in this table. What is current real GDP in terms of base-year prices?

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

In any year, real GDP

For the aggregate economy, income equals

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

Real GDP will increase only if the

What Is Economics

The Economic Problem

Demand and Supply

Elasticity

Efficiency and Equity

Governments 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 Business Cycle, Inflation, and Deflation

Fiscal Policy

Monetary Policy

Macro Only: International Trade Policy

Filters

Use the figure below to answer the following questions. Figure 20.3.2 -Refer to Figure 20.3.2. In the figure, a recession begins at point and an expansion begins at point .