Question 1

How is disposable personal income best defined?

Accepted Answer

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

Question 2

Which statistic is the best single measure of an economy's well-being?

Accepted Answer

A)  unemployment rate 
B)  inflation rate 
C)  gross domestic product 
D)  trade balance 
A)  unemployment rate 
B)  inflation rate 
C)  gross domestic product 
D)  trade balance

Question 3

If nominal GDP is $1 trillion and real GDP is $0.9 trillion,what is the GDP deflator?

Accepted Answer

A)  0.9 
B)  1.43 
C)  90 
D)  143 
A)  0.9 
B)  1.43 
C)  90 
D)  143

Question 4

Sally used to prepare her own meals,but now she eats out more.How does Sally's change of habit affect GDP?

Accepted Answer

A)  It raises GDP by the additional value Sally produces during her new extra time. 
B)  It raises GDP by the price of the restaurant meals. 
C)  It raises GDP by less than the restaurant price of the meals because now Sally does not work anymore for preparing meals. 
D)  It raises GDP by more than the restaurant price of the meals because Sally can do something else during the extra time that she now has. 
A)  It raises GDP by the additional value Sally produces during her new extra time. 
B)  It raises GDP by the price of the restaurant meals. 
C)  It raises GDP by less than the restaurant price of the meals because now Sally does not work anymore for preparing meals. 
D)  It raises GDP by more than the restaurant price of the meals because Sally can do something else during the extra time that she now has.

Question 5

What is the GDP deflator?

Accepted Answer

A)  a measure of the overall price level 
B)  a measure of economic well-being 
C)  a measure of price changes 
D)  a measure of total income 
A)  a measure of the overall price level 
B)  a measure of economic well-being 
C)  a measure of price changes 
D)  a measure of total income

Question 6

How does the value of total sales of all firms in the country for a year compare with GDP?

Accepted Answer

A)  It equals GDP for the year. 
B)  It is larger than GDP for the year. 
C)  It is smaller than GDP for the year. 
D)  It could be larger or smaller than GDP for the year. 
A)  It equals GDP for the year. 
B)  It is larger than GDP for the year. 
C)  It is smaller than GDP for the year. 
D)  It could be larger or smaller than GDP for the year.

Question 7

Why does expenditure equal income?

Accepted Answer

A)  because firms are required by law to pay out all their revenue as income to someone 
B)  because ultimately firms are owned by households 
C)  because for every sale there is a buyer and a seller 
D)  because the demand and supply of goods and services must be equal 
A)  because firms are required by law to pay out all their revenue as income to someone 
B)  because ultimately firms are owned by households 
C)  because for every sale there is a buyer and a seller 
D)  because the demand and supply of goods and services must be equal

Question 8

Anna,a Canadian citizen who works in France for a Swiss firm,receives her pay in a German bank.To which country's GDP does Anna's employment contribute?

Accepted Answer

A)  Canada. 
B)  Germany 
C)  France 
D)  Switzerland 
A)  Canada. 
B)  Germany 
C)  France 
D)  Switzerland

Question 9

A professional gambler moves from a province where gambling is illegal to a province where gambling is legal.What impact does this move have on Canada's GDP?

Accepted Answer

A)  It raises GDP. 
B)  It decreases GDP. 
C)  It does not change GDP because gambling is never included in GDP. 
D)  It does not change GDP because in either case his income is included. 
A)  It raises GDP. 
B)  It decreases GDP. 
C)  It does not change GDP because gambling is never included in GDP. 
D)  It does not change GDP because in either case his income is included.

Question 10

A Canadian company owned by a Japanese citizen has opened a sushi restaurant in Romania.Where is the profit included?

Accepted Answer

A)  in Romanian GNP 
B)  in Canadian GDP 
C)  in Romanian GDP 
D)  in Japanese GDP 
A)  in Romanian GNP 
B)  in Canadian GDP 
C)  in Romanian GDP 
D)  in Japanese GDP

Question 11

Suppose two Canadian provinces,say Alberta and Manitoba,produce only wheat,10 tonnes each.The price of wheat in Alberta is $240 a tonne and in Manitoba is $250 a tonne.
​a.Calculate nominal GDP in the two provinces and discuss the results.
b.Imagine a method of calculating GDP that would allow a more accurate comparison between the economic performances of the two provinces.

Accepted Answer

a.Alberta's GDP = 10 × 240 = $2400; Mani

Question 12

Income exceeds production.

Accepted Answer

A) True 
 B)False

Question 13

How are intermediate goods treated in GDP computations?

Accepted Answer

A)  They are included so we can get a measure of sales. 
B)  They are excluded because their value is already counted in the value of final goods. 
C)  They are excluded because there are too many to accurately measure. 
D)  They are included because they are final goods for the firm producing them. 
A)  They are included so we can get a measure of sales. 
B)  They are excluded because their value is already counted in the value of final goods. 
C)  They are excluded because there are too many to accurately measure. 
D)  They are included because they are final goods for the firm producing them.

Question 14

During a federal election campaign,the incumbent argues that he should be re-elected because GDP grew by 12 percent during his four-year term in office.You know that population grew by 4 percent over the period,and that the GDP deflator increased by 6 percent during the past four years.What can you conclude about real GDP per person?

Accepted Answer

A)  It grew by more than 12 percent. 
B)  It grew,but by less than 12 percent. 
C)  It was unchanged. 
D)  It decreased. 
A)  It grew by more than 12 percent. 
B)  It grew,but by less than 12 percent. 
C)  It was unchanged. 
D)  It decreased.

Question 15

In 2014,what size was Canadian investment?

Accepted Answer

A)  15 percent of GDP 
B)  17 percent of GDP 
C)  19 percent of GDP 
D)  24 percent of GDP 
A)  15 percent of GDP 
B)  17 percent of GDP 
C)  19 percent of GDP 
D)  24 percent of GDP

Question 16

Which statement best describes real GDP?

Accepted Answer

A)  Real GDP evaluates,at current prices,all goods and services produced in a base year. 
B)  Real GDP evaluates,at base-year prices,all goods and services produced in the current year. 
C)  Real GDP evaluates,at current prices,a current-year basket of goods and services. 
D)  Real GDP evaluates,at current prices,a base-year basket of goods and services. 
A)  Real GDP evaluates,at current prices,all goods and services produced in a base year. 
B)  Real GDP evaluates,at base-year prices,all goods and services produced in the current year. 
C)  Real GDP evaluates,at current prices,a current-year basket of goods and services. 
D)  Real GDP evaluates,at current prices,a base-year basket of goods and services.

Question 17

In computing GDP,what is investment?

Accepted Answer

A)  spending on stocks,bonds,and other financial assets 
B)  spending on real estate and financial assets 
C)  spending on new capital equipment,inventories,and structures,including new housing 
D)  spending on capital equipment,inventories,and structures,excluding household purchases of new housing 
A)  spending on stocks,bonds,and other financial assets 
B)  spending on real estate and financial assets 
C)  spending on new capital equipment,inventories,and structures,including new housing 
D)  spending on capital equipment,inventories,and structures,excluding household purchases of new housing

Question 18

According to international studies,larger GDP per person is associated with which other measures of well-being?

Accepted Answer

A)  longer life expectancy and a higher rate of population growth 
B)  longer life expectancy and a higher percentage of the population that is literate 
C)  similar life expectancy and a higher quality of the environment 
D)  similar life expectancy and a higher percentage of the population that is literate 
A)  longer life expectancy and a higher rate of population growth 
B)  longer life expectancy and a higher percentage of the population that is literate 
C)  similar life expectancy and a higher quality of the environment 
D)  similar life expectancy and a higher percentage of the population that is literate

Question 19

What was the approximate Canadian GDP in 2014?

Accepted Answer

A)  $1400 billion 
B)  $1600 billion 
C)  $1800 billion 
D)  $2000 billion 
A)  $1400 billion 
B)  $1600 billion 
C)  $1800 billion 
D)  $2000 billion

Question 20

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

Accepted Answer

A)  GDP increased at an annual rate of 6.4 percent during the last quarter. 
B)  GDP increased at an annual rate of 4.8 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 at an annual rate of 6.4 percent during the last quarter. 
B)  GDP increased at an annual rate of 4.8 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.

How is disposable personal income best defined?

Which statistic is the best single measure of an economy's well-being?

If nominal GDP is $1 trillion and real GDP is $0.9 trillion,what is the GDP deflator?

Sally used to prepare her own meals,but now she eats out more.How does Sally's change of habit affect GDP?

What is the GDP deflator?

How does the value of total sales of all firms in the country for a year compare with GDP?

Why does expenditure equal income?

Anna,a Canadian citizen who works in France for a Swiss firm,receives her pay in a German bank.To which country's GDP does Anna's employment contribute?

A professional gambler moves from a province where gambling is illegal to a province where gambling is legal.What impact does this move have on Canada's GDP?

A Canadian company owned by a Japanese citizen has opened a sushi restaurant in Romania.Where is the profit included?

Income exceeds production.

How are intermediate goods treated in GDP computations?

In 2014,what size was Canadian investment?

Which statement best describes real GDP?

In computing GDP,what is investment?

According to international studies,larger GDP per person is associated with which other measures of well-being?

What was the approximate Canadian GDP in 2014?

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

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 Small 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

How is disposable personal income best defined?

Which statistic is the best single measure of an economy's well-being?

If nominal GDP is $1 trillion and real GDP is $0.9 trillion,what is the GDP deflator?

Sally used to prepare her own meals,but now she eats out more.How does Sally's change of habit affect GDP?

What is the GDP deflator?

How does the value of total sales of all firms in the country for a year compare with GDP?

Why does expenditure equal income?

Anna,a Canadian citizen who works in France for a Swiss firm,receives her pay in a German bank.To which country's GDP does Anna's employment contribute?

A professional gambler moves from a province where gambling is illegal to a province where gambling is legal.What impact does this move have on Canada's GDP?

A Canadian company owned by a Japanese citizen has opened a sushi restaurant in Romania.Where is the profit included?

Income exceeds production.

How are intermediate goods treated in GDP computations?

In 2014,what size was Canadian investment?

Which statement best describes real GDP?

In computing GDP,what is investment?

According to international studies,larger GDP per person is associated with which other measures of well-being?

What was the approximate Canadian GDP in 2014?

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

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 Small 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