Question 1

In national-income accounting,"depreciation" refers to

Accepted Answer

A) a term used in accounting,not economics. 
B) the amount by which the capital stock is depleted during the accounting period. 
C) net investment. 
D) the increase in the economy's stock of capital per year. 
E) the decrease in the economy's stock of capital per year. 
A) a term used in accounting,not economics. 
B) the amount by which the capital stock is depleted during the accounting period. 
C) net investment. 
D) the increase in the economy's stock of capital per year. 
E) the decrease in the economy's stock of capital per year.

Question 2

Researchers have been developing broad indexes of "social well-being" as an alternative to measures of per capita GDP.What are they trying to capture with such a measure?

Accepted Answer

A) The variation in aggregate consumption because consumption is a better measure of individual well-being than income. 
B) Variation in aggregate income adjusted for variations in the country's net foreign asset position. 
C) Detailed measures of the various components of GDP that have meaningful impact on the social well-being of individuals and households. 
D) Variations in the true purchasing power of income,especially as influenced by changes in interaction between prices and the exchange rate. 
E) Movement in variables that are important to people's well-being,such as environment,education,and leisure,that are not captured in current measures of per capita income. 
A) The variation in aggregate consumption because consumption is a better measure of individual well-being than income. 
B) Variation in aggregate income adjusted for variations in the country's net foreign asset position. 
C) Detailed measures of the various components of GDP that have meaningful impact on the social well-being of individuals and households. 
D) Variations in the true purchasing power of income,especially as influenced by changes in interaction between prices and the exchange rate. 
E) Movement in variables that are important to people's well-being,such as environment,education,and leisure,that are not captured in current measures of per capita income.

Question 3

Which of the following would be classified as "investment" in the national income and product accounts?

Accepted Answer

A) the purchase of a government bond 
B) the purchase of Telus stock 
C) the construction of a new factory 
D) the payment of real-estate fees 
E) the holding of money 
A) the purchase of a government bond 
B) the purchase of Telus stock 
C) the construction of a new factory 
D) the payment of real-estate fees 
E) the holding of money

Question 4

The total investment that occurs in the economy is called gross investment.When calculating GDP using the expenditure approach,the gross investment component (Ia)is equivalent to

Accepted Answer

A) net investment only. 
B) net investment minus depreciation. 
C) gross investment plus depreciation. 
D) net investment plus depreciation. 
E) fixed investment minus depreciation. 
A) net investment only. 
B) net investment minus depreciation. 
C) gross investment plus depreciation. 
D) net investment plus depreciation. 
E) fixed investment minus depreciation.

Question 5

In national-income accounting,the concept of "net domestic income" is useful because it

Accepted Answer

A) does not include inventory investment. 
B) includes government transfer payments. 
C) includes all goods produced but not exchanged in markets. 
D) excludes the value of output that is used as replacement investment. 
E) represents national income plus depreciation. 
A) does not include inventory investment. 
B) includes government transfer payments. 
C) includes all goods produced but not exchanged in markets. 
D) excludes the value of output that is used as replacement investment. 
E) represents national income plus depreciation.

Question 6

Consider the investment component (I)of GDP.To calculate the change in the value of inventories for the investment component of GDP,one should use their

Accepted Answer

A) cost of production at the time they were produced. 
B) cost of production minus the costs of labour and capital. 
C) current market value. 
D) market value at the time they were produced. 
E) market value at the time they were added to inventory. 
A) cost of production at the time they were produced. 
B) cost of production minus the costs of labour and capital. 
C) current market value. 
D) market value at the time they were produced. 
E) market value at the time they were added to inventory.

Question 7

In Shoetown,a rancher takes $0 worth of inputs and produces animal skins,which he sells to the tanner for $400.The tanner then sells leather to the shoemaker for $700,and the shoemaker then sells $1200 worth of shoes.The value added by the tanner is

Accepted Answer

A) $0. 
B) $300. 
C) $400. 
D) $500. 
E) $1200. 
A) $0. 
B) $300. 
C) $400. 
D) $500. 
E) $1200.

Question 8

How does "net domestic income" differ from gross domestic product? Net domestic income is GDP minus

Accepted Answer

A) that part of it not actually paid to households,plus transfer payments to households. 
B) that part of it not actually paid to households,minus personal income taxes paid by households. 
C) that part of it not actually paid to households,plus transfer payments to households,minus personal taxes paid by households. 
D) replacement investment. 
E) the sum of corporate,personal and sales taxes paid to the government. 
A) that part of it not actually paid to households,plus transfer payments to households. 
B) that part of it not actually paid to households,minus personal income taxes paid by households. 
C) that part of it not actually paid to households,plus transfer payments to households,minus personal taxes paid by households. 
D) replacement investment. 
E) the sum of corporate,personal and sales taxes paid to the government.

Question 9

In national-income accounting,changes in inventories are

Accepted Answer

A) classified as part of current actual investment. 
B) included under actual consumption expenditures. 
C) referred to as intermediate goods. 
D) described as actual fixed investment. 
E) not included in the national accounts. 
A) classified as part of current actual investment. 
B) included under actual consumption expenditures. 
C) referred to as intermediate goods. 
D) described as actual fixed investment. 
E) not included in the national accounts.

Question 10

Why are illegal activities,unreported activities,and non-market activities excluded from GDP?

Accepted Answer

A) They do not contribute to human welfare. 
B) They do not have an opportunity cost. 
C) They are difficult to measure. 
D) The do not contribute to the true national output of goods and services. 
E) They are morally repugnant. 
A) They do not contribute to human welfare. 
B) They do not have an opportunity cost. 
C) They are difficult to measure. 
D) The do not contribute to the true national output of goods and services. 
E) They are morally repugnant.

Question 11

The table below includes data for a one-year period required to calculate GDP for this economy.All figures are in billions of dollars.   TABLE 20-3 Refer to Table 20-3.What is the value of GDP (in billions of dollars),as calculated from the expenditure side?

Accepted Answer

A) $12 134 
B) $11 482 
C) $11 208 
D) $10 605 
E) $9244 
A) $12 134 
B) $11 482 
C) $11 208 
D) $10 605 
E) $9244

Question 12

Consider Canada's GDP deflator and Consumer Price Index (CPI).Now suppose the prices of the following goods and services increased.Which is likely to have a larger effect on the GDP deflator than the CPI?

Accepted Answer

A) bananas 
B) chocolate 
C) Hollywood movies 
D) consumer electronics 
E) forest products 
A) bananas 
B) chocolate 
C) Hollywood movies 
D) consumer electronics 
E) forest products

Question 13

When calculating GDP from the expenditure side,how do net exports enter the equation?

Accepted Answer

A) They are NOT included because they do not represent an expenditure by Canadians. 
B) They may or may not be included depending on whether they are for final or intermediate goods. 
C) They are included as a separate category. 
D) They are included but as part of C,I,or G. 
E) They are included only if it is a positive number. 
A) They are NOT included because they do not represent an expenditure by Canadians. 
B) They may or may not be included depending on whether they are for final or intermediate goods. 
C) They are included as a separate category. 
D) They are included but as part of C,I,or G. 
E) They are included only if it is a positive number.

Question 14

When computing GDP from the expenditure side,which of the following items is excluded from the government component (Ga)?

Accepted Answer

A) employment-insurance benefits 
B) salaries to Canadian Forces officers 
C) costs of Parliamentary Committees 
D) rental of office space by the government 
E) operating costs of the Canadian Coast Guard 
A) employment-insurance benefits 
B) salaries to Canadian Forces officers 
C) costs of Parliamentary Committees 
D) rental of office space by the government 
E) operating costs of the Canadian Coast Guard

Question 15

When calculating GDP from the income side,which of the following is included in non-factor payments?

Accepted Answer

A) wages and salaries 
B) GST 
C) income tax 
D) bond interest 
E) business profits 
A) wages and salaries 
B) GST 
C) income tax 
D) bond interest 
E) business profits

Question 16

FIGURE 20-1 Refer to Figure 20-1.Real GDP increased by approximately ________% between 1995 and 2010.

Accepted Answer

A) 9 
B) 17 
C) 35 
D) 52 
E) 75 
A) 9 
B) 17 
C) 35 
D) 52 
E) 75

Question 17

When calculating GDP from the expenditure side,which of the following is true of the investment component,Ia?

Accepted Answer

A) It excludes expansions of existing factories. 
B) It only includes business fixed investment. 
C) It includes the transfer of houses between individuals. 
D) It includes changes in inventories. 
E) It only includes decumulation of inventories. 
A) It excludes expansions of existing factories. 
B) It only includes business fixed investment. 
C) It includes the transfer of houses between individuals. 
D) It includes changes in inventories. 
E) It only includes decumulation of inventories.

Question 18

The table below shows the total output and prices for an economy that produces only two goods,potatoes and oil.Data is provided for the years 2008 and 2018. Quantities Produced Prices   TABLE 20-6
Refer to Table 20-6.If 2008 is the base year,the GDP deflator in 2018 was

Accepted Answer

A) 59.1. 
B) 85.7. 
C) 100. 
D) 131.67. 
E) 159.1. 
A) 59.1. 
B) 85.7. 
C) 100. 
D) 131.67. 
E) 159.1.

Question 19

The table below shows total output for an economy over 2 years.   TABLE 20-8 Refer to Table 20-8.The real GDP in 2018,expressed in 2017 prices,was

Accepted Answer

A) $1760. 
B) $1500. 
C) $1300. 
D) $1260. 
E) $410. 
A) $1760. 
B) $1500. 
C) $1300. 
D) $1260. 
E) $410.

Question 20

Consider the circular flow of income and expenditure in the Canadian economy.Which of the following is a withdrawal from the circular flow?

Accepted Answer

A) investment 
B) consumption 
C) saving 
D) exports 
E) government purchases 
A) investment 
B) consumption 
C) saving 
D) exports 
E) government purchases

In national-income accounting,"depreciation" refers to

Researchers have been developing broad indexes of "social well-being" as an alternative to measures of per capita GDP.What are they trying to capture with such a measure?

Which of the following would be classified as "investment" in the national income and product accounts?

The total investment that occurs in the economy is called gross investment.When calculating GDP using the expenditure approach,the gross investment component (I_a)is equivalent to

In national-income accounting,the concept of "net domestic income" is useful because it

Consider the investment component (I)of GDP.To calculate the change in the value of inventories for the investment component of GDP,one should use their

In Shoetown,a rancher takes $0 worth of inputs and produces animal skins,which he sells to the tanner for $400.The tanner then sells leather to the shoemaker for $700,and the shoemaker then sells $1200 worth of shoes.The value added by the tanner is

How does "net domestic income" differ from gross domestic product? Net domestic income is GDP minus

In national-income accounting,changes in inventories are

Why are illegal activities,unreported activities,and non-market activities excluded from GDP?

The table below includes data for a one-year period required to calculate GDP for this economy.All figures are in billions of dollars. TABLE 20-3 Refer to Table 20-3.What is the value of GDP (in billions of dollars),as calculated from the expenditure side?

Consider Canada's GDP deflator and Consumer Price Index (CPI).Now suppose the prices of the following goods and services increased.Which is likely to have a larger effect on the GDP deflator than the CPI?

When calculating GDP from the expenditure side,how do net exports enter the equation?

When computing GDP from the expenditure side,which of the following items is excluded from the government component (G_a)?

When calculating GDP from the income side,which of the following is included in non-factor payments?

FIGURE 20-1 Refer to Figure 20-1.Real GDP increased by approximately ________% between 1995 and 2010.

When calculating GDP from the expenditure side,which of the following is true of the investment component,I_a?

The table below shows the total output and prices for an economy that produces only two goods,potatoes and oil.Data is provided for the years 2008 and 2018. Quantities Produced Prices TABLE 20-6 Refer to Table 20-6.If 2008 is the base year,the GDP deflator in 2018 was

The table below shows total output for an economy over 2 years. TABLE 20-8 Refer to Table 20-8.The real GDP in 2018,expressed in 2017 prices,was

Consider the circular flow of income and expenditure in the Canadian economy.Which of the following is a withdrawal from the circular flow?

Economic Issues and Concepts

Economic Theories, data, and Graphs

Demand, supply, and Price

What Macroeconomics Is All About

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Real Gdp and the Price Level in the Short Run

From the Short Run to the Long Run: the Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters

Exam 20: The Measurement of National Income

In national-income accounting,"depreciation" refers to

Researchers have been developing broad indexes of "social well-being" as an alternative to measures of per capita GDP.What are they trying to capture with such a measure?

Which of the following would be classified as "investment" in the national income and product accounts?

The total investment that occurs in the economy is called gross investment.When calculating GDP using the expenditure approach,the gross investment component (Ia)is equivalent to

In national-income accounting,the concept of "net domestic income" is useful because it

Consider the investment component (I)of GDP.To calculate the change in the value of inventories for the investment component of GDP,one should use their

In Shoetown,a rancher takes $0 worth of inputs and produces animal skins,which he sells to the tanner for $400.The tanner then sells leather to the shoemaker for $700,and the shoemaker then sells $1200 worth of shoes.The value added by the tanner is

How does "net domestic income" differ from gross domestic product? Net domestic income is GDP minus

In national-income accounting,changes in inventories are

Why are illegal activities,unreported activities,and non-market activities excluded from GDP?

The table below includes data for a one-year period required to calculate GDP for this economy.All figures are in billions of dollars. TABLE 20-3 Refer to Table 20-3.What is the value of GDP (in billions of dollars),as calculated from the expenditure side?

Consider Canada's GDP deflator and Consumer Price Index (CPI).Now suppose the prices of the following goods and services increased.Which is likely to have a larger effect on the GDP deflator than the CPI?

When calculating GDP from the expenditure side,how do net exports enter the equation?

When computing GDP from the expenditure side,which of the following items is excluded from the government component (Ga)?

When calculating GDP from the income side,which of the following is included in non-factor payments?

FIGURE 20-1 Refer to Figure 20-1.Real GDP increased by approximately ________% between 1995 and 2010.

When calculating GDP from the expenditure side,which of the following is true of the investment component,Ia?

The table below shows the total output and prices for an economy that produces only two goods,potatoes and oil.Data is provided for the years 2008 and 2018. Quantities Produced Prices TABLE 20-6 Refer to Table 20-6.If 2008 is the base year,the GDP deflator in 2018 was

The table below shows total output for an economy over 2 years. TABLE 20-8 Refer to Table 20-8.The real GDP in 2018,expressed in 2017 prices,was

Consider the circular flow of income and expenditure in the Canadian economy.Which of the following is a withdrawal from the circular flow?

Economic Issues and Concepts

Economic Theories, data, and Graphs

Demand, supply, and Price

What Macroeconomics Is All About

The Simplest Short-Run Macro Model

Adding Government and Trade to the Simple Macro Model

Real Gdp and the Price Level in the Short Run

From the Short Run to the Long Run: the Adjustment of Factor Prices

Long-Run Economic Growth

Money and Banking

Money, interest Rates, and Economic Activity

Monetary Policy in Canada

Inflation and Disinflation

Unemployment Fluctuations and the Nairu

Government Debt and Deficits

The Gains From International Trade

Trade Policy

Exchange Rates and the Balance of Payments

Filters

The total investment that occurs in the economy is called gross investment.When calculating GDP using the expenditure approach,the gross investment component (I_a)is equivalent to

When computing GDP from the expenditure side,which of the following items is excluded from the government component (G_a)?

When calculating GDP from the expenditure side,which of the following is true of the investment component,I_a?