Question 1

The GDP deflator is a measure of the

Accepted Answer

A) total production of the economy adjusted for inflation. 
B) total production of the economy unadjusted for inflation. 
C) average level of prices of final goods and services in the economy. 
D) average level of prices of intermediate goods and services in the economy. 
E) the depth of a recession. 
A) total production of the economy adjusted for inflation. 
B) total production of the economy unadjusted for inflation. 
C) average level of prices of final goods and services in the economy. 
D) average level of prices of intermediate goods and services in the economy. 
E) the depth of a recession. C

Question 2

Based on the increase in GDP that comes with a war effort, we can conclude that wars make consumers better off.

Accepted Answer

A) True 
 B)False  False

Question 3

An example of an intermediate good would be

Accepted Answer

A) a new car. 
B) a used car. 
C) the rims on a new car. 
D) new rims to replace old rims on a used car. 
E) the wages earned by a mechanic repairing your bent rims. 
A) a new car. 
B) a used car. 
C) the rims on a new car. 
D) new rims to replace old rims on a used car. 
E) the wages earned by a mechanic repairing your bent rims. C

Question 4

If Gladys sells her 1998 Jeep Cherokee for $3,500 in 2015, the sale of her car contributes $3,500 to 2015 GDP.

Accepted Answer

A) True 
 B)False

Question 5

If nominal GDP is less than real GDP, then the GDP deflator will be greater than 100.

Accepted Answer

A) True 
 B)False

Question 6

If the GDP deflator is equal to 100, then for that year nominal GDP is equal to real GDP.

Accepted Answer

A) True 
 B)False

Question 7

Table 4.20   A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above.
-Refer to Table 4.20.What is real GDP in 2017, using 2017 as the base year?

Accepted Answer

A) $28,885 
B) $11,790 
C) $11,200 
D) $10,275 
E) $8,750 
A) $28,885 
B) $11,790 
C) $11,200 
D) $10,275 
E) $8,750

Question 8

A car that is produced in 2018 is not sold until 2019.According to the definition of GDP, in which year's GDP should it be counted?

Accepted Answer

A) 2018 
B) 2019 
C) Half of the sales price will count as part of 2018 GDP and half will count as part of 2019 GDP. 
D) The production cost will count as part of 2018 GDP while the sales price will count as part of 2019 GDP. 
E) It should not be counted in either years' GDP. 
A) 2018 
B) 2019 
C) Half of the sales price will count as part of 2018 GDP and half will count as part of 2019 GDP. 
D) The production cost will count as part of 2018 GDP while the sales price will count as part of 2019 GDP. 
E) It should not be counted in either years' GDP.

Question 9

If prices in the economy rise, then

Accepted Answer

A) the purchasing power of a dollar rises. 
B) the purchasing power of a dollar stays constant. 
C) the purchasing power of a dollar declines. 
D) the purchasing power of a dollar cannot be determined. 
A) the purchasing power of a dollar rises. 
B) the purchasing power of a dollar stays constant. 
C) the purchasing power of a dollar declines. 
D) the purchasing power of a dollar cannot be determined.

Question 10

Table 4.32  
-Refer to Table 4.32.The table above represents hypothetical data from the National Income Accounts for 2018.Use the data to calculate household income and household disposable income.

Accepted Answer

Household Income = Net national income -

Question 11

Which of the following are not considered part of government purchases?

Accepted Answer

A) Employment Insurance payments 
B) teachers' salaries paid by a provincial government 
C) a tank purchased by the federal government 
D) a bridge purchased by the local government 
E) new uniforms for the RCMP 
A) Employment Insurance payments 
B) teachers' salaries paid by a provincial government 
C) a tank purchased by the federal government 
D) a bridge purchased by the local government 
E) new uniforms for the RCMP

Question 12

In the first half 2015 some Canadian businesses outside the natural resource sector saw a slow down in orders, these businesses were experiencing the effects of

Accepted Answer

A) deflation. 
B) the underground economy. 
C) the business cycle. 
D) depreciation. 
E) global warming. 
A) deflation. 
B) the underground economy. 
C) the business cycle. 
D) depreciation. 
E) global warming.

Question 13

Macroeconomics seeks to understand

Accepted Answer

A) economic growth, business cycles, and inflation. 
B) industry sales, marketing strategies and corporate growth. 
C) product demand, product cost, and profit maximization. 
D) public choices, private choices, and consumer maximization. 
E) the structure of international supply chains. 
A) economic growth, business cycles, and inflation. 
B) industry sales, marketing strategies and corporate growth. 
C) product demand, product cost, and profit maximization. 
D) public choices, private choices, and consumer maximization. 
E) the structure of international supply chains.

Question 14

If prices rise on average in the Canadian economy, the purchasing power of a dollar declines.

Accepted Answer

A) True 
 B)False

Question 15

The measure of production that values output using base-year prices is called

Accepted Answer

A) real GDP. 
B) nominal GDP. 
C) value-added GDP. 
D) underground GDP. 
E) chain-weighted GDP. 
A) real GDP. 
B) nominal GDP. 
C) value-added GDP. 
D) underground GDP. 
E) chain-weighted GDP.

Question 16

The purchase by a foreign government of an airplane produced in Canada is included in Canadian

Accepted Answer

A) consumption expenditures. 
B) investment expenditures. 
C) government purchases. 
D) net exports. 
E) consumer spending. 
A) consumption expenditures. 
B) investment expenditures. 
C) government purchases. 
D) net exports. 
E) consumer spending.

Question 17

Table 4.20   A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above.
-Refer to Table 4.20.What is nominal GDP in 2017 when 2007 is the base year?

Accepted Answer

A) $28,885 
B) $11,790 
C) $11,200 
D) $10,275 
E) $8,750 
A) $28,885 
B) $11,790 
C) $11,200 
D) $10,275 
E) $8,750

Question 18

The purchase of a new automobile is included in

Accepted Answer

A) consumption expenditures on services. 
B) consumption expenditures on nondurable goods. 
C) consumption expenditures on durable goods. 
D) investment expenditures. 
E) household savings. 
A) consumption expenditures on services. 
B) consumption expenditures on nondurable goods. 
C) consumption expenditures on durable goods. 
D) investment expenditures. 
E) household savings.

Question 19

Which of the following accurately describes an effect of a flooding on GDP?

Accepted Answer

A) GDP would decrease reflecting the costs of cleanup. 
B) GDP would increase reflecting the costs of cleanup. 
C) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the flood. 
D) GDP would increase well-being. 
E) GDP would decrease due to the assets destroyed by flooding. 
A) GDP would decrease reflecting the costs of cleanup. 
B) GDP would increase reflecting the costs of cleanup. 
C) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the flood. 
D) GDP would increase well-being. 
E) GDP would decrease due to the assets destroyed by flooding.

Question 20

In Canada, household spending on consumption as a percentage of GDP is

Accepted Answer

A) lower than most other countries. 
B) higher than most other countries. 
C) the highest among OECD countries. 
D) the lowest among OECD countries. 
E) slightly below average among OECD countries. 
A) lower than most other countries. 
B) higher than most other countries. 
C) the highest among OECD countries. 
D) the lowest among OECD countries. 
E) slightly below average among OECD countries.

The GDP deflator is a measure of the

Based on the increase in GDP that comes with a war effort, we can conclude that wars make consumers better off.

An example of an intermediate good would be

If Gladys sells her 1998 Jeep Cherokee for $3,500 in 2015, the sale of her car contributes $3,500 to 2015 GDP.

If nominal GDP is less than real GDP, then the GDP deflator will be greater than 100.

If the GDP deflator is equal to 100, then for that year nominal GDP is equal to real GDP.

Table 4.20 A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above. -Refer to Table 4.20.What is real GDP in 2017, using 2017 as the base year?

A car that is produced in 2018 is not sold until 2019.According to the definition of GDP, in which year's GDP should it be counted?

If prices in the economy rise, then

Table 4.32 -Refer to Table 4.32.The table above represents hypothetical data from the National Income Accounts for 2018.Use the data to calculate household income and household disposable income.

Which of the following are not considered part of government purchases?

In the first half 2015 some Canadian businesses outside the natural resource sector saw a slow down in orders, these businesses were experiencing the effects of

Macroeconomics seeks to understand

If prices rise on average in the Canadian economy, the purchasing power of a dollar declines.

The measure of production that values output using base-year prices is called

The purchase by a foreign government of an airplane produced in Canada is included in Canadian

Table 4.20 A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above. -Refer to Table 4.20.What is nominal GDP in 2017 when 2007 is the base year?

The purchase of a new automobile is included in

Which of the following accurately describes an effect of a flooding on GDP?

In Canada, household spending on consumption as a percentage of GDP is

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

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Exam 4: GDP: Measuring Total Production and Income

The GDP deflator is a measure of the

Based on the increase in GDP that comes with a war effort, we can conclude that wars make consumers better off.

An example of an intermediate good would be

If Gladys sells her 1998 Jeep Cherokee for $3,500 in 2015, the sale of her car contributes $3,500 to 2015 GDP.

If nominal GDP is less than real GDP, then the GDP deflator will be greater than 100.

If the GDP deflator is equal to 100, then for that year nominal GDP is equal to real GDP.

Table 4.20 A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above. -Refer to Table 4.20.What is real GDP in 2017, using 2017 as the base year?

A car that is produced in 2018 is not sold until 2019.According to the definition of GDP, in which year's GDP should it be counted?

If prices in the economy rise, then

Table 4.32 -Refer to Table 4.32.The table above represents hypothetical data from the National Income Accounts for 2018.Use the data to calculate household income and household disposable income.

Which of the following are not considered part of government purchases?

In the first half 2015 some Canadian businesses outside the natural resource sector saw a slow down in orders, these businesses were experiencing the effects of

Macroeconomics seeks to understand

If prices rise on average in the Canadian economy, the purchasing power of a dollar declines.

The measure of production that values output using base-year prices is called

The purchase by a foreign government of an airplane produced in Canada is included in Canadian

Table 4.20 A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above. -Refer to Table 4.20.What is nominal GDP in 2017 when 2007 is the base year?

The purchase of a new automobile is included in

Which of the following accurately describes an effect of a flooding on GDP?

In Canada, household spending on consumption as a percentage of GDP is

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

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