Question 1

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 2

Choose the correct statement.

Accepted Answer

A) When nominal GDP increases, real GDP decreases. 
B) Nominal GDP is just a more precise name for real GDP. 
C) We measure the change in production by comparing nominal GDP in one year with real GDP in the previous year. 
D) Nominal GDP is just a more precise name for GDP. 
E) Nominal GDP and real GDP both increase when the average level of prices increase. 
A) When nominal GDP increases, real GDP decreases. 
B) Nominal GDP is just a more precise name for real GDP. 
C) We measure the change in production by comparing nominal GDP in one year with real GDP in the previous year. 
D) Nominal GDP is just a more precise name for GDP. 
E) Nominal GDP and real GDP both increase when the average level of prices increase.

Question 3

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 4

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 5

Use the table below to answer the following questions.
Table 20.2.4
  
-Refer to Table 20.2.4. Net domestic income at market prices is equal to

Accepted Answer

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

Question 6

SaskWidget produces plastic parts. At the beginning of the year, they held $24 million worth of capital. At the end of the year, they held $20 million worth of capital. One can conclude that

Accepted Answer

A) net investment increased by $4 million. 
B) gross investment decreased by $4 million. 
C) gross investment increased by $4 million. 
D) depreciation exceeded gross investment by $4 million. 
E) depreciation equals $4 million. 
A) net investment increased by $4 million. 
B) gross investment decreased by $4 million. 
C) gross investment increased by $4 million. 
D) depreciation exceeded gross investment by $4 million. 
E) depreciation equals $4 million.

Question 7

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 8

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 9

Use the information below to answer the following questions.
Fact 20.1.1
At the beginning of 2014, 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 2014, 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 2014 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 10

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.

Question 11

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. The chained-dollar real GDP in 2014 expressed in 2013 dollars is

Accepted Answer

A) $7,472.50 
B) $7,500.00 
C) $1.575.50 
D) $7, 575.00 
A) $7,472.50 
B) $7,500.00 
C) $1.575.50 
D) $7, 575.00

Question 12

Real GDP equals

Accepted Answer

A) nominal GDP minus the value of intermediate goods. 
B) nominal GDP adjusted for the depreciation of capital. 
C) the value of final goods and services produced in a given year when valued at the prices of a reference base year. 
D) nominal GDP minus the value of goods exported to foreign countries. 
E) nominal GDP minus the rate of inflation. 
A) nominal GDP minus the value of intermediate goods. 
B) nominal GDP adjusted for the depreciation of capital. 
C) the value of final goods and services produced in a given year when valued at the prices of a reference base year. 
D) nominal GDP minus the value of goods exported to foreign countries. 
E) nominal GDP minus the rate of inflation.

Question 13

Use the figure below to answer the following questions.
   
Figure 20.3.2
-Refer to Figure 20.3.2. In the figure, a trough is at point ________ and a peak is 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 14

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 15

To obtain the factor cost of a good from its market price,

Accepted Answer

A) add indirect taxes and subtract subsidies. 
B) subtract indirect taxes and add subsidies. 
C) subtract both indirect taxes and subsidies. 
D) add both indirect taxes and subsidies. 
E) subtract depreciation. 
A) add indirect taxes and subtract subsidies. 
B) subtract indirect taxes and add subsidies. 
C) subtract both indirect taxes and subsidies. 
D) add both indirect taxes and subsidies. 
E) subtract depreciation.

Question 16

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 GDP?

Accepted Answer

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

Question 17

Consumption expenditure includes only

Accepted Answer

A) expenditure by Canadian households on goods and services produced in Canada. 
B) expenditure by Canadian households and firms on goods and services produced in Canada. 
C) expenditure by Canadian households, firms, and governments on goods and services produced in Canada. 
D) expenditure by Canadian households on goods and services produced in Canada and in the rest of the world. 
E) expenditure by Canadian households and foreigners on goods and services produced in Canada. 
A) expenditure by Canadian households on goods and services produced in Canada. 
B) expenditure by Canadian households and firms on goods and services produced in Canada. 
C) expenditure by Canadian households, firms, and governments on goods and services produced in Canada. 
D) expenditure by Canadian households on goods and services produced in Canada and in the rest of the world. 
E) expenditure by Canadian households and foreigners on goods and services produced in Canada.

Question 18

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 19

In calculating GDP, economists use the value of final goods and services because

Accepted Answer

A) by using final goods and services, they avoid double counting. 
B) final goods can be exported to other countries. 
C) intermediate goods are imported from other countries. 
D) GDP is underestimated if intermediate goods are used instead. 
E) final goods and services do not depreciate. 
A) by using final goods and services, they avoid double counting. 
B) final goods can be exported to other countries. 
C) intermediate goods are imported from other countries. 
D) GDP is underestimated if intermediate goods are used instead. 
E) final goods and services do not depreciate.

Question 20

Wages, salaries, and supplementary labour income are components of which approach to measuring GDP?

Accepted Answer

A) income approach 
B) expenditure approach 
C) injections approach 
D) output approach 
E) value-added approach 
A) income approach 
B) expenditure approach 
C) injections approach 
D) output approach 
E) value-added approach

Exam 20: Measuring Gdp and Economic Growth

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

Choose the correct statement.

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

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.

Use the table below to answer the following questions. Table 20.2.4 -Refer to Table 20.2.4. Net domestic income at market prices is equal to

SaskWidget produces plastic parts. At the beginning of the year, they held $24 million worth of capital. At the end of the year, they held $20 million worth of capital. One can conclude that

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?

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

In the circular flow model,

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. The chained-dollar real GDP in 2014 expressed in 2013 dollars is

Real GDP equals

Use the figure below to answer the following questions. Figure 20.3.2 -Refer to Figure 20.3.2. In the figure, a trough is at point ________ and a peak is at point ________.

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.

To obtain the factor cost of a good from its market price,

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 GDP?

Consumption expenditure includes only

Gross domestic product is

In calculating GDP, economists use the value of final goods and services because

Wages, salaries, and supplementary labour income are components of which approach to measuring GDP?

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

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.

Use the figure below to answer the following questions. Figure 20.3.2 -Refer to Figure 20.3.2. In the figure, a trough is at point and a peak is at point .