Question 1

Government expenditures does not include

Accepted Answer

A)  state and local spending. 
B)  federal non-defense spending. 
C)  transfers. 
D)  federal defense spending. 
E)  government investment. 
A)  state and local spending. 
B)  federal non-defense spending. 
C)  transfers. 
D)  federal defense spending. 
E)  government investment.

Question 2

An example of a flow would be the

Accepted Answer

A)  rate at which water goes down the drain. 
B)  amount of water in a bathtub. 
C)  percent of pollutants in tap water. 
D)  pressure of water in a pipe. 
E)  rate at which the cold water comes out of the tap. 
A)  rate at which water goes down the drain. 
B)  amount of water in a bathtub. 
C)  percent of pollutants in tap water. 
D)  pressure of water in a pipe. 
E)  rate at which the cold water comes out of the tap.

Question 3

For the following question(s), suppose that an economy produces only food and clothing, and that price and quantity data are given in the table below.
  
-Year 2 nominal GDP is

Accepted Answer

A)  $200. 
B)  $270. 
C)  $310. 
D)  $390. 
E)  $450. 
A)  $200. 
B)  $270. 
C)  $310. 
D)  $390. 
E)  $450.

Question 4

For the following question(s), suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below.
  
-An example of a stock would be

Accepted Answer

A)  real GDP. 
B)  savings. 
C)  investment. 
D)  the amount of money in circulation. 
E)  government spending. 
A)  real GDP. 
B)  savings. 
C)  investment. 
D)  the amount of money in circulation. 
E)  government spending.

Question 5

The value of a producer's output minus the value of all intermediate goods used in the production of that output is called the producer's

Accepted Answer

A)  net output. 
B)  accounting profit. 
C)  value added. 
D)  profit margin. 
E)  costs of production. 
A)  net output. 
B)  accounting profit. 
C)  value added. 
D)  profit margin. 
E)  costs of production.

Question 6

For the following question(s), suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below.
  
-Significant problems with measuring real GDP and the price level include

Accepted Answer

A)  changes in the number of consumers. 
B)  changes in relative price levels. 
C)  changes in standards of living. 
D)  purchases of used goods. 
E)  changes in consumption patterns. 
A)  changes in the number of consumers. 
B)  changes in relative price levels. 
C)  changes in standards of living. 
D)  purchases of used goods. 
E)  changes in consumption patterns.

Question 7

For the following question(s), suppose that an economy produces only food and clothing, and that price and quantity data are given in the table below.
  
-Year 1 nominal GDP is

Accepted Answer

A)  $200. 
B)  $270. 
C)  $310. 
D)  $390. 
E)  $450. 
A)  $200. 
B)  $270. 
C)  $310. 
D)  $390. 
E)  $450.

Question 8

To calculate value added, we need to subtract

Accepted Answer

A)  only the cost of domestically produced intermediate inputs. 
B)  only the cost of foreign-produced intermediate inputs. 
C)  the cost of domestic- and foreign-produced intermediate inputs. 
D)  total imports. 
E)  the cost of all goods and services exported. 
A)  only the cost of domestically produced intermediate inputs. 
B)  only the cost of foreign-produced intermediate inputs. 
C)  the cost of domestic- and foreign-produced intermediate inputs. 
D)  total imports. 
E)  the cost of all goods and services exported.

Question 9

In Canada, real GDP is currently calculated using

Accepted Answer

A)  a variable-weighting scheme. 
B)  a chain-weighting scheme. 
C)  a fixed-weighting scheme. 
D)  an autoregressive scheme. 
E)  constant-inflation scheme. 
A)  a variable-weighting scheme. 
B)  a chain-weighting scheme. 
C)  a fixed-weighting scheme. 
D)  an autoregressive scheme. 
E)  constant-inflation scheme.

Question 10

For the following question(s), suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below.
  
-It is difficult to accurately measure real GDP because

Accepted Answer

A)  it does not include taxes. 
B)  it does not include money transfers. 
C)  it does not accurately take into account the introduction of new goods. 
D)  it cannot take into account changes in government policy over time. 
E)  it does not take into account intermediate goods. 
A)  it does not include taxes. 
B)  it does not include money transfers. 
C)  it does not accurately take into account the introduction of new goods. 
D)  it cannot take into account changes in government policy over time. 
E)  it does not take into account intermediate goods.

Question 11

The components of investment expenditures include

Accepted Answer

A)  investment in stocks and bonds. 
B)  residential investment. 
C)  investment in plant and equipment abroad. 
D)  investment in consumer's education. 
E)  investment in health care. 
A)  investment in stocks and bonds. 
B)  residential investment. 
C)  investment in plant and equipment abroad. 
D)  investment in consumer's education. 
E)  investment in health care.

Question 12

Inventory investment consists of

Accepted Answer

A)  construction expenditures, raw materials, and inventories of finished goods. 
B)  goods in process, raw materials, and purchases of office machinery. 
C)  raw materials, goods in process, and construction expenditures. 
D)  inventories of finished goods, goods in process, and raw materials. 
E)  used finished goods. 
A)  construction expenditures, raw materials, and inventories of finished goods. 
B)  goods in process, raw materials, and purchases of office machinery. 
C)  raw materials, goods in process, and construction expenditures. 
D)  inventories of finished goods, goods in process, and raw materials. 
E)  used finished goods.

Question 13

Value added is equal to the value of a firm's production minus

Accepted Answer

A)  all of its costs of production. 
B)  labour costs. 
C)  investment expenditures. 
D)  intermediate goods used in production. 
E)  costs of production. 
A)  all of its costs of production. 
B)  labour costs. 
C)  investment expenditures. 
D)  intermediate goods used in production. 
E)  costs of production.

Question 14

Problems with interpreting the unemployment rate as a measure of labour market tightness include

Accepted Answer

A)  biases in the CPI and dissatisfied workers. 
B)  dissatisfied workers and discouraged workers. 
C)  discouraged workers and variations in how intensively the unemployed search for work. 
D)  variations in how intensively the unemployed search for work and biases in the CPI. 
E)  the rental vacancy rate. 
A)  biases in the CPI and dissatisfied workers. 
B)  dissatisfied workers and discouraged workers. 
C)  discouraged workers and variations in how intensively the unemployed search for work. 
D)  variations in how intensively the unemployed search for work and biases in the CPI. 
E)  the rental vacancy rate.

Question 15

For the following question(s), suppose an economy produces only pens and pencils, and that the quantity and price data is given by this table:
  
-What is the inflation rate using base year 1?

Accepted Answer

A)  10% 
B)  15% 
C)  20% 
D)  25% 
E)  13% 
A)  10% 
B)  15% 
C)  20% 
D)  25% 
E)  13%

Question 16

Recently, consumption has comprised approximately

Accepted Answer

A)  28% of GDP. 
B)  58% of GDP. 
C)  40% of GDP. 
D)  80% of GDP. 
E)  15% of GDP. 
A)  28% of GDP. 
B)  58% of GDP. 
C)  40% of GDP. 
D)  80% of GDP. 
E)  15% of GDP.

Question 17

Government expenditures includes

Accepted Answer

A)  federal defense spending. 
B)  consumer spending. 
C)  residential spending. 
D)  financial investment. 
E)  inventory investment. 
A)  federal defense spending. 
B)  consumer spending. 
C)  residential spending. 
D)  financial investment. 
E)  inventory investment.

Question 18

List and discuss two reasons why national income accountants could make errors in measuring GDP.

Accepted Answer

GDP could be mismeasured because of the

Question 19

Suppose that g1 represents the ratio of year 2 GDP to year 1 GDP, both valued at year 1 prices. Suppose that g2 represents the ratio of year 2 GDP to year 1 GDP, both valued at year 2 prices. The ratio of chain-weighted year 2 GDP to chain-weighted year 1 GDP equals

Accepted Answer

A)  $ (g 1+g 2) / 2 $ 
B)  $ \left(g_{1} \times g_{2}\right) / 2 $ 
C)  $ \left(\sqrt{g_{1}}+\sqrt{g_{2}}\right) / 2 $ 
D)  $ \sqrt{g_{1} \times g_{2}} $ 
E)  $ \sqrt{g_{1} / g_{1}} $ 
A)  $ (g 1+g 2) / 2 $ 
B)  $ \left(g_{1} \times g_{2}\right) / 2 $ 
C)  $ \left(\sqrt{g_{1}}+\sqrt{g_{2}}\right) / 2 $ 
D)  $ \sqrt{g_{1} \times g_{2}} $ 
E)  $ \sqrt{g_{1} / g_{1}} $

Question 20

The income-expenditure identity is best paraphrased as

Accepted Answer

A)  all spending generates income. 
B)  all profits are used for investment spending. 
C)  on average, consumers cannot save. 
D)  on average, government can spend no more than what it collects in income taxes. 
E)  all income is spent. 
A)  all spending generates income. 
B)  all profits are used for investment spending. 
C)  on average, consumers cannot save. 
D)  on average, government can spend no more than what it collects in income taxes. 
E)  all income is spent.

Government expenditures does not include

An example of a flow would be the

For the following question(s), suppose that an economy produces only food and clothing, and that price and quantity data are given in the table below. -Year 2 nominal GDP is

For the following question(s), suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below. -An example of a stock would be

The value of a producer's output minus the value of all intermediate goods used in the production of that output is called the producer's

For the following question(s), suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below. -Significant problems with measuring real GDP and the price level include

For the following question(s), suppose that an economy produces only food and clothing, and that price and quantity data are given in the table below. -Year 1 nominal GDP is

To calculate value added, we need to subtract

In Canada, real GDP is currently calculated using

For the following question(s), suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below. -It is difficult to accurately measure real GDP because

The components of investment expenditures include

Inventory investment consists of

Value added is equal to the value of a firm's production minus

Problems with interpreting the unemployment rate as a measure of labour market tightness include

For the following question(s), suppose an economy produces only pens and pencils, and that the quantity and price data is given by this table: -What is the inflation rate using base year 1?

Recently, consumption has comprised approximately

Government expenditures includes

List and discuss two reasons why national income accountants could make errors in measuring GDP.

Suppose that g1 represents the ratio of year 2 GDP to year 1 GDP, both valued at year 1 prices. Suppose that g2 represents the ratio of year 2 GDP to year 1 GDP, both valued at year 2 prices. The ratio of chain-weighted year 2 GDP to chain-weighted year 1 GDP equals

The income-expenditure identity is best paraphrased as

Introduction

Business Cycle Measurement

Consumer and Firm Behaviour: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

A Monetary Intertemporal Model: Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters

Exam 2: Measurement

Government expenditures does not include

An example of a flow would be the

For the following question(s), suppose that an economy produces only food and clothing, and that price and quantity data are given in the table below. -Year 2 nominal GDP is

For the following question(s), suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below. -An example of a stock would be

The value of a producer's output minus the value of all intermediate goods used in the production of that output is called the producer's

For the following question(s), suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below. -Significant problems with measuring real GDP and the price level include

For the following question(s), suppose that an economy produces only food and clothing, and that price and quantity data are given in the table below. -Year 1 nominal GDP is

To calculate value added, we need to subtract

In Canada, real GDP is currently calculated using

For the following question(s), suppose that an economy produces only bread and computers. Assume that all production is consumed in each year, and that price and quantity data are given in the table below. -It is difficult to accurately measure real GDP because

The components of investment expenditures include

Inventory investment consists of

Value added is equal to the value of a firm's production minus

Problems with interpreting the unemployment rate as a measure of labour market tightness include

For the following question(s), suppose an economy produces only pens and pencils, and that the quantity and price data is given by this table: -What is the inflation rate using base year 1?

Recently, consumption has comprised approximately

Government expenditures includes

List and discuss two reasons why national income accountants could make errors in measuring GDP.

Suppose that g1 represents the ratio of year 2 GDP to year 1 GDP, both valued at year 1 prices. Suppose that g2 represents the ratio of year 2 GDP to year 1 GDP, both valued at year 2 prices. The ratio of chain-weighted year 2 GDP to chain-weighted year 1 GDP equals

The income-expenditure identity is best paraphrased as

Introduction

Business Cycle Measurement

Consumer and Firm Behaviour: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Search and Unemployment

Economic Growth: Malthus and Solow

Income Disparity among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

A Monetary Intertemporal Model: Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters