Question 1

How do GDP and NDP differ? What does it mean if net investment is negative?

Accepted Answer

Net domestic product equals GDP minus de

Question 2

If consumption expenditures are $500 million,spending on fixed investment is $100 million,the increase in inventories equals $5 million,imports are $50 million,exports are $55 million,government spending on goods and services is $200 million,than GDP is

Accepted Answer

A) $790 million. 
B) $800 million. 
C) $810 million. 
D) $830 million. 
A) $790 million. 
B) $800 million. 
C) $810 million. 
D) $830 million.

Question 3

The owner of an oil well in Alberta sells 1,000 barrels of oil to a refinery in the U.S.for $12,000.This transaction

Accepted Answer

A) increases GDP by $12,000. 
B) has no effect on GDP because the refinery is in the U.S. 
C) decreases GDP because oil reserves have fallen by 1,000 barrels. 
D) has no effect on GDP because this is the sale of an intermediate product. 
A) increases GDP by $12,000. 
B) has no effect on GDP because the refinery is in the U.S. 
C) decreases GDP because oil reserves have fallen by 1,000 barrels. 
D) has no effect on GDP because this is the sale of an intermediate product.

Question 4

The amount of income received by households prior to the payment of personal income taxes is called

Accepted Answer

A) disposable wages. 
B) personal income. 
C) national income. 
D) net domestic product. 
A) disposable wages. 
B) personal income. 
C) national income. 
D) net domestic product.

Question 5

Which of the following is a main limitation of GDP?

Accepted Answer

A) GDP figures are grossly inaccurate due to sampling errors 
B) The real definition of what is and is not included in GDP is unclear 
C) GDP is not a good measure of a nation's overall welfare 
D) GDP includes some products which by their very nature are bad products,such military weapons 
A) GDP figures are grossly inaccurate due to sampling errors 
B) The real definition of what is and is not included in GDP is unclear 
C) GDP is not a good measure of a nation's overall welfare 
D) GDP includes some products which by their very nature are bad products,such military weapons

Question 6

Which of the following is included in GDP?

Accepted Answer

A) the buying and selling of securities 
B) government transfer payments 
C) private transfer payments 
D) none of the above 
A) the buying and selling of securities 
B) government transfer payments 
C) private transfer payments 
D) none of the above

Question 7

Adjusting nominal GDP for price changes from a base year yields

Accepted Answer

A) current GDP. 
B) real GDP. 
C) constant disposable income. 
D) GDP net of relative price changes. 
A) current GDP. 
B) real GDP. 
C) constant disposable income. 
D) GDP net of relative price changes.

Question 8

Suppose net domestic product is $4.8 million,government and business transfer payments are $0.7 million,indirect business taxes are $0.4 million,and personal income taxes are $0.8 million.Then,national income equals

Accepted Answer

A) $2.9 million. 
B) $3.6 million. 
C) $4.4 million. 
D) $5.1 million. 
A) $2.9 million. 
B) $3.6 million. 
C) $4.4 million. 
D) $5.1 million.

Question 9

According to the circular flow,total output produced and total income

Accepted Answer

A) should differ by the value of intermediate goods. 
B) should be increased by the unanticipated rate of inflation. 
C) will always be increasing in a capitalist economy. 
D) will be equal. 
A) should differ by the value of intermediate goods. 
B) should be increased by the unanticipated rate of inflation. 
C) will always be increasing in a capitalist economy. 
D) will be equal.

Question 10

Which of the following is a final good?

Accepted Answer

A) seed used for corn 
B) wheat used for bread 
C) electricity used for producing automobiles 
D) a lawn mower purchased by a household 
A) seed used for corn 
B) wheat used for bread 
C) electricity used for producing automobiles 
D) a lawn mower purchased by a household

Question 11

If deflation is occurring and nominal GDP is increasing over time,then real GDP is

Accepted Answer

A) decreasing. 
B) increasing at the same rate as nominal GDP. 
C) increasing more slowly than nominal GDP. 
D) increasing faster than nominal GDP. 
A) decreasing. 
B) increasing at the same rate as nominal GDP. 
C) increasing more slowly than nominal GDP. 
D) increasing faster than nominal GDP.

Question 12

Explain how value added is used to compute GDP.

Accepted Answer

GDP does not count intermediate goods be

Question 13

Is looking at changes in gross domestic product over time a good way to determine whether the people in a country are experiencing an increase in their standards of living? Why or why not?

Accepted Answer

No.GDP figures need to be corrected for

Question 14

Which of the following is included in GDP?

Accepted Answer

A) total exports 
B) total imports minus total exports 
C) total imports 
D) total exports minus total imports 
A) total exports 
B) total imports minus total exports 
C) total imports 
D) total exports minus total imports

Question 15

If nominal GDP in 1987 was $500 billion with a price index of 100,what would be the real GDP in 1995 if the 1995 nominal GDP was $900 billion and the 1995 price index was 140?

Accepted Answer

A) $900 billion 
B) $540 billion 
C) $800 billion 
D) $643 billion 
A) $900 billion 
B) $540 billion 
C) $800 billion 
D) $643 billion

Question 16

If nominal GDP in 1992 was $3,000 billion,and the price level index was 330 (1977 = 100),then real GDP in terms of the price level in 1977 was about

Accepted Answer

A) $105 billion. 
B) $4,220 billion. 
C) $909 billion. 
D) $537 billion. 
A) $105 billion. 
B) $4,220 billion. 
C) $909 billion. 
D) $537 billion.

Question 17

Explain the two methods of determining national income.What is generally done when they are not precisely equal to one another in practice?

Accepted Answer

First explain the expenditure and income

Question 18

Which of the following is an example of the gross private domestic investment component of GDP?

Accepted Answer

A) You buy a share of GM stock. 
B) GM buys a new drill press. 
C) You put money into your savings account. 
D) You put money into your checking account. 
A) You buy a share of GM stock. 
B) GM buys a new drill press. 
C) You put money into your savings account. 
D) You put money into your checking account.

Question 19

Which of the following would most likely be sold in the product market?

Accepted Answer

A) a new car 
B) stocks and bonds 
C) iron ore 
D) entrepreneurial ability 
A) a new car 
B) stocks and bonds 
C) iron ore 
D) entrepreneurial ability

Question 20

If consumption expenditures are $500,spending on fixed investment is $100,imports are $40,exports are $75,the capital consumption allowance is $25,government spending is $50,and inventories have fallen by $5,then GDP is

Accepted Answer

A) $25 greater than NDP. 
B) $20 greater than NDP. 
C) $50 greater than NDP. 
D) the same as NDP. 
A) $25 greater than NDP. 
B) $20 greater than NDP. 
C) $50 greater than NDP. 
D) the same as NDP.

How do GDP and NDP differ? What does it mean if net investment is negative?

If consumption expenditures are $500 million,spending on fixed investment is $100 million,the increase in inventories equals $5 million,imports are $50 million,exports are $55 million,government spending on goods and services is $200 million,than GDP is

The owner of an oil well in Alberta sells 1,000 barrels of oil to a refinery in the U.S.for $12,000.This transaction

The amount of income received by households prior to the payment of personal income taxes is called

Which of the following is a main limitation of GDP?

Which of the following is included in GDP?

Adjusting nominal GDP for price changes from a base year yields

Suppose net domestic product is $4.8 million,government and business transfer payments are $0.7 million,indirect business taxes are $0.4 million,and personal income taxes are $0.8 million.Then,national income equals

According to the circular flow,total output produced and total income

Which of the following is a final good?

If deflation is occurring and nominal GDP is increasing over time,then real GDP is

Explain how value added is used to compute GDP.

Is looking at changes in gross domestic product over time a good way to determine whether the people in a country are experiencing an increase in their standards of living? Why or why not?

Which of the following is included in GDP?

If nominal GDP in 1987 was $500 billion with a price index of 100,what would be the real GDP in 1995 if the 1995 nominal GDP was $900 billion and the 1995 price index was 140?

If nominal GDP in 1992 was $3,000 billion,and the price level index was 330 (1977 = 100),then real GDP in terms of the price level in 1977 was about

Explain the two methods of determining national income.What is generally done when they are not precisely equal to one another in practice?

Which of the following is an example of the gross private domestic investment component of GDP?

Which of the following would most likely be sold in the product market?

If consumption expenditures are $500,spending on fixed investment is $100,imports are $40,exports are $75,the capital consumption allowance is $25,government spending is $50,and inventories have fallen by $5,then GDP is

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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Exam 5: Measuring the Economys Performance

How do GDP and NDP differ? What does it mean if net investment is negative?

If consumption expenditures are $500 million,spending on fixed investment is $100 million,the increase in inventories equals $5 million,imports are $50 million,exports are $55 million,government spending on goods and services is $200 million,than GDP is

The owner of an oil well in Alberta sells 1,000 barrels of oil to a refinery in the U.S.for $12,000.This transaction

The amount of income received by households prior to the payment of personal income taxes is called

Which of the following is a main limitation of GDP?

Which of the following is included in GDP?

Adjusting nominal GDP for price changes from a base year yields

Suppose net domestic product is $4.8 million,government and business transfer payments are $0.7 million,indirect business taxes are $0.4 million,and personal income taxes are $0.8 million.Then,national income equals

According to the circular flow,total output produced and total income

Which of the following is a final good?

If deflation is occurring and nominal GDP is increasing over time,then real GDP is

Explain how value added is used to compute GDP.

Is looking at changes in gross domestic product over time a good way to determine whether the people in a country are experiencing an increase in their standards of living? Why or why not?

Which of the following is included in GDP?

If nominal GDP in 1987 was $500 billion with a price index of 100,what would be the real GDP in 1995 if the 1995 nominal GDP was $900 billion and the 1995 price index was 140?

If nominal GDP in 1992 was $3,000 billion,and the price level index was 330 (1977 = 100),then real GDP in terms of the price level in 1977 was about

Explain the two methods of determining national income.What is generally done when they are not precisely equal to one another in practice?

Which of the following is an example of the gross private domestic investment component of GDP?

Which of the following would most likely be sold in the product market?

If consumption expenditures are $500,spending on fixed investment is $100,imports are $40,exports are $75,the capital consumption allowance is $25,government spending is $50,and inventories have fallen by $5,then GDP is

The Nature of Economics

Production Possibilities and Economic Systems

Demand and Supply

Introduction to Macroeconomics

Modelling Real Gdp and the Price Level in the Long Run

Economic Growth and Development

Modelling Real Gdp and the Price Level in the Short Run

Consumption, investment, and the Multiplier

The Public Sector

Fiscal Policy and the Public Debt

Money and the Banking System

Money Creation and Deposit Insurance

The Bank of Canada and Monetary Policy

Issues in Stabilization Policy

Comparative Advantage and the Open Economy

Exchange Rates and the Balance of Payments

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