Question 1

Table 5-2
  
-Refer to Table 5-2. What is the personal income for this economy?

Accepted Answer

A) $417 
B) $367 
C) $349 
D) $348 
A) $417 
B) $367 
C) $349 
D) $348

Question 2

In the national income accounts, what is depreciation called?

Accepted Answer

A) "total tax depreciation" 
B) "capital consumption allowance" 
C) "consumption of circulating capital" 
D) "loss due to wear" 
A) "total tax depreciation" 
B) "capital consumption allowance" 
C) "consumption of circulating capital" 
D) "loss due to wear"

Question 3

According to the simple circular-flow model, which of the following do firms buy from households?

Accepted Answer

A) natural resources, such as oil and minerals 
B) goods and services 
C) inventions and innovations 
D) labour 
A) natural resources, such as oil and minerals 
B) goods and services 
C) inventions and innovations 
D) labour

Question 4

Which of the following represents a transfer payment?

Accepted Answer

A) You transfer $1000 from your bank account to a mutual fund. 
B) The bank transfers $10 quarterly interest to your savings account. 
C) The government sends your grandfather his pension cheque. 
D) Your employer automatically transfers $100 each month from your wages to a nontaxable medical spending account. 
A) You transfer $1000 from your bank account to a mutual fund. 
B) The bank transfers $10 quarterly interest to your savings account. 
C) The government sends your grandfather his pension cheque. 
D) Your employer automatically transfers $100 each month from your wages to a nontaxable medical spending account.

Question 5

The government reports that "GDP increased by 1.6 percent in the last quarter." What does this statement mean?

Accepted Answer

A) GDP increased by 6.4 percent for the year. 
B) GDP increased at an annual rate of 6.4 percent during the last quarter. 
C) GDP increased at an annual rate of 1.6 percent during the last quarter. 
D) GDP increased at an annual rate of 0.4 percent during the last quarter. 
A) GDP increased by 6.4 percent for the year. 
B) GDP increased at an annual rate of 6.4 percent during the last quarter. 
C) GDP increased at an annual rate of 1.6 percent during the last quarter. 
D) GDP increased at an annual rate of 0.4 percent during the last quarter.

Question 6

Which of the following best defines disposable personal income?

Accepted Answer

A) the income that households have left after paying taxes and nontax payments to the government 
B) the income that businesses have left after paying taxes and nontax payments to the government 
C) the income that households and noncorporate businesses have left after paying taxes and nontax payments to the government 
D) the income that households and businesses have left after paying taxes and nontax payments to the government 
A) the income that households have left after paying taxes and nontax payments to the government 
B) the income that businesses have left after paying taxes and nontax payments to the government 
C) the income that households and noncorporate businesses have left after paying taxes and nontax payments to the government 
D) the income that households and businesses have left after paying taxes and nontax payments to the government

Question 7

If the GDP deflator is 200 and nominal GDP is $1 trillion billion, what is real GDP?

Accepted Answer

A) $5 billion 
B) $200 billion 
C) $500 billion 
D) $2 trillion 
A) $5 billion 
B) $200 billion 
C) $500 billion 
D) $2 trillion

Question 8

Which of the following questions is more likely to be studied by a macroeconomist than a microeconomist?

Accepted Answer

A) Why do prices in general rise by more in some countries than others? 
B) Why do wages differ across industries? 
C) Does education increase a worker's income on average? 
D) Is there usually a gain from trade between two countries? 
A) Why do prices in general rise by more in some countries than others? 
B) Why do wages differ across industries? 
C) Does education increase a worker's income on average? 
D) Is there usually a gain from trade between two countries?

Question 9

In 2008 what was, approximately, Canadian GDP?

Accepted Answer

A) $1100 billion 
B) $1400 billion 
C) $1600 billion 
D) $1800 billion 
A) $1100 billion 
B) $1400 billion 
C) $1600 billion 
D) $1800 billion

Question 10

According to economists, why is it useful to measure the behaviour of the economy with statistics such as GDP?

Accepted Answer

A) It can be used to forecast economic recessions and prevent them. 
B) It measures the total value of a country's wealth. 
C) It can be helpful in developing macroeconomic science, but is not useful for policymaking. 
D) It is a crucial step toward developing the science of macroeconomics. 
A) It can be used to forecast economic recessions and prevent them. 
B) It measures the total value of a country's wealth. 
C) It can be helpful in developing macroeconomic science, but is not useful for policymaking. 
D) It is a crucial step toward developing the science of macroeconomics.

Question 11

What is the relationship between income and expenditure for an economy?

Accepted Answer

A) Income is greater than expenditure. 
B) Income is less than expenditure. 
C) Income equals expenditure. 
D) Income could be greater or less than expenditure. 
A) Income is greater than expenditure. 
B) Income is less than expenditure. 
C) Income equals expenditure. 
D) Income could be greater or less than expenditure.

Question 12

What is the difference between nominal and real GDP?

Accepted Answer

A) Nominal GDP values production at current prices, while real GDP values production at constant prices. 
B) Nominal GDP values production at constant prices, while real GDP values production at current prices. 
C) Nominal GDP values production at market prices, while real GDP values production at the cost of the resources used in the production process. 
D) Nominal GDP consistently underestimates the value of production, while real GDP consistently overestimates the value of production. 
A) Nominal GDP values production at current prices, while real GDP values production at constant prices. 
B) Nominal GDP values production at constant prices, while real GDP values production at current prices. 
C) Nominal GDP values production at market prices, while real GDP values production at the cost of the resources used in the production process. 
D) Nominal GDP consistently underestimates the value of production, while real GDP consistently overestimates the value of production.

Question 13

Suppose that 25 years ago a country had nominal GDP of 1000, a GDP deflator of 200, and a population of 100. Today that country has a nominal GDP of 3000, a deflator of 400, and a population of 150. What happened to the real GDP per person?

Accepted Answer

A) It more than doubled. 
B) It rose, but less than doubled. 
C) It fell. 
D) It has not changed. 
A) It more than doubled. 
B) It rose, but less than doubled. 
C) It fell. 
D) It has not changed.

Question 14

If the Canadian government pays an economist at the federal Ministry of Finance $50 000 in salary in 2010 and $30 000 in retirement benefits in 2011, how are the payments treated?

Accepted Answer

A) Each payment will be included in GDP as government purchases for the respective years. 
B) The 2010 payment is included in 2010 GDP as government purchases, but the 2011 payment is not included in 2011 GDP. 
C) The 2010 payment is included in 2010 GDP as government purchases, and the 2011 payment is included in 2011 GDP as government transfer payments. 
D) The 2010 payment is included in 2010 GDP as government purchases, and the 2011 payment is allocated to previous years' GDP according to the amount of work performed each year. 
A) Each payment will be included in GDP as government purchases for the respective years. 
B) The 2010 payment is included in 2010 GDP as government purchases, but the 2011 payment is not included in 2011 GDP. 
C) The 2010 payment is included in 2010 GDP as government purchases, and the 2011 payment is included in 2011 GDP as government transfer payments. 
D) The 2010 payment is included in 2010 GDP as government purchases, and the 2011 payment is allocated to previous years' GDP according to the amount of work performed each year.

Question 15

What would be the cause of total spending rising from one year to the next?

Accepted Answer

A) The economy must be producing a larger output of goods and services. 
B) Prices at which goods and services are sold must be higher. 
C) Either the economy must be producing a larger output of goods and services, or the prices at which goods and services are sold must be higher, or both. 
D) Employment or productivity must be rising. 
A) The economy must be producing a larger output of goods and services. 
B) Prices at which goods and services are sold must be higher. 
C) Either the economy must be producing a larger output of goods and services, or the prices at which goods and services are sold must be higher, or both. 
D) Employment or productivity must be rising.

Question 16

If GDP rises, what happens?

Accepted Answer

A) Income and expenditure must both rise. 
B) Income and expenditure must both fall. 
C) Income must rise, but expenditure may rise or fall. 
D) Expenditure must rise, but income may rise or fall. 
A) Income and expenditure must both rise. 
B) Income and expenditure must both fall. 
C) Income must rise, but expenditure may rise or fall. 
D) Expenditure must rise, but income may rise or fall.

Question 17

GDP is used as the basic measure of a society's economic well-being. What is a better measure of the economic well-being of individuals in society?

Accepted Answer

A) GDP per person 
B) the consumption component of GDP 
C) government expenditures per person 
D) the level of business investment 
A) GDP per person 
B) the consumption component of GDP 
C) government expenditures per person 
D) the level of business investment

Question 18

Suppose that Nova Scotia produces cheese and fish. In 2010, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. In 2006, the base year, the price of cheese was $10 per unit, and the price of fish was $75 per unit. What can we conclude?

Accepted Answer

A) Nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5 
B) Nominal GDP is $500, real GDP is $800, and the GDP deflator is 160 
C) Nominal GDP is $800, real GDP is $500, and the GDP deflator is 160 
D) Nominal GDP is $800, real GDP is $500, and the GDP deflator is 62.5 
A) Nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5 
B) Nominal GDP is $500, real GDP is $800, and the GDP deflator is 160 
C) Nominal GDP is $800, real GDP is $500, and the GDP deflator is 160 
D) Nominal GDP is $800, real GDP is $500, and the GDP deflator is 62.5

Question 19

Table 5-3.
Prices and Quantities
  
-Refer to Table 5-3. Using 2008 as the base year, what can we conclude for 2009?

Accepted Answer

A) Real GDP is $880 and the GDP deflator is 80. 
B) Real GDP is $880 and the GDP deflator is 95 
C) Real GDP is $880 and the GDP deflator is 125 
D) Real GDP is $950 and the GDP deflator is 95. 
A) Real GDP is $880 and the GDP deflator is 80. 
B) Real GDP is $880 and the GDP deflator is 95 
C) Real GDP is $880 and the GDP deflator is 125 
D) Real GDP is $950 and the GDP deflator is 95.

Question 20

With respect to GDP, how is unemployment compensation treated?

Accepted Answer

A) It is included as part of GDP because it represents income. 
B) It is not included as part of GDP because it is a transfer payment. 
C) It is included as part of GDP because the recipients must have worked in the past to qualify. 
D) It is not included as part of GDP because the payments reduce business profits. 
A) It is included as part of GDP because it represents income. 
B) It is not included as part of GDP because it is a transfer payment. 
C) It is included as part of GDP because the recipients must have worked in the past to qualify. 
D) It is not included as part of GDP because the payments reduce business profits.

Table 5-2 -Refer to Table 5-2. What is the personal income for this economy?

In the national income accounts, what is depreciation called?

According to the simple circular-flow model, which of the following do firms buy from households?

Which of the following represents a transfer payment?

The government reports that "GDP increased by 1.6 percent in the last quarter." What does this statement mean?

Which of the following best defines disposable personal income?

If the GDP deflator is 200 and nominal GDP is $1 trillion billion, what is real GDP?

Which of the following questions is more likely to be studied by a macroeconomist than a microeconomist?

In 2008 what was, approximately, Canadian GDP?

According to economists, why is it useful to measure the behaviour of the economy with statistics such as GDP?

What is the relationship between income and expenditure for an economy?

What is the difference between nominal and real GDP?

Suppose that 25 years ago a country had nominal GDP of 1000, a GDP deflator of 200, and a population of 100. Today that country has a nominal GDP of 3000, a deflator of 400, and a population of 150. What happened to the real GDP per person?

If the Canadian government pays an economist at the federal Ministry of Finance $50 000 in salary in 2010 and $30 000 in retirement benefits in 2011, how are the payments treated?

What would be the cause of total spending rising from one year to the next?

If GDP rises, what happens?

GDP is used as the basic measure of a society's economic well-being. What is a better measure of the economic well-being of individuals in society?

Suppose that Nova Scotia produces cheese and fish. In 2010, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. In 2006, the base year, the price of cheese was $10 per unit, and the price of fish was $75 per unit. What can we conclude?

Table 5-3. Prices and Quantities -Refer to Table 5-3. Using 2008 as the base year, what can we conclude for 2009?

With respect to GDP, how is unemployment compensation treated?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 5: Measuring a Nations Income

Table 5-2 -Refer to Table 5-2. What is the personal income for this economy?

In the national income accounts, what is depreciation called?

According to the simple circular-flow model, which of the following do firms buy from households?

Which of the following represents a transfer payment?

The government reports that "GDP increased by 1.6 percent in the last quarter." What does this statement mean?

Which of the following best defines disposable personal income?

If the GDP deflator is 200 and nominal GDP is $1 trillion billion, what is real GDP?

Which of the following questions is more likely to be studied by a macroeconomist than a microeconomist?

In 2008 what was, approximately, Canadian GDP?

According to economists, why is it useful to measure the behaviour of the economy with statistics such as GDP?

What is the relationship between income and expenditure for an economy?

What is the difference between nominal and real GDP?

Suppose that 25 years ago a country had nominal GDP of 1000, a GDP deflator of 200, and a population of 100. Today that country has a nominal GDP of 3000, a deflator of 400, and a population of 150. What happened to the real GDP per person?

If the Canadian government pays an economist at the federal Ministry of Finance $50 000 in salary in 2010 and $30 000 in retirement benefits in 2011, how are the payments treated?

What would be the cause of total spending rising from one year to the next?

If GDP rises, what happens?

GDP is used as the basic measure of a society's economic well-being. What is a better measure of the economic well-being of individuals in society?

Suppose that Nova Scotia produces cheese and fish. In 2010, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. In 2006, the base year, the price of cheese was $10 per unit, and the price of fish was $75 per unit. What can we conclude?

Table 5-3. Prices and Quantities -Refer to Table 5-3. Using 2008 as the base year, what can we conclude for 2009?

With respect to GDP, how is unemployment compensation treated?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters