Question 1

How is a potato treated in GDP terms?

Accepted Answer

A)  It is always counted as an intermediate good. 
B)  It is counted as a final good if it is used by a restaurant to make French fries. 
C)  It is counted as a final good if it is used by a consumer who makes mashed potatoes for her own consumption. 
D)  It is always counted as a final good. 
A)  It is always counted as an intermediate good. 
B)  It is counted as a final good if it is used by a restaurant to make French fries. 
C)  It is counted as a final good if it is used by a consumer who makes mashed potatoes for her own consumption. 
D)  It is always counted as a final good. C

Question 2

Joao used to volunteer to cut his elderly neighbour's grass, but now his neighbour pays a company to do it. How does this change affect GDP?

Accepted Answer

A)  It decreases GDP by more than the price of the service. 
B)  It increases GDP by less than the price of the service. . 
C)  It decreases GDP by the price of the service. 
D)  It increases GDP by the price of the service. 
A)  It decreases GDP by more than the price of the service. 
B)  It increases GDP by less than the price of the service. . 
C)  It decreases GDP by the price of the service. 
D)  It increases GDP by the price of the service. D

Question 3

Which of the following is included in Canadian GDP?

Accepted Answer

A)  Canadian exports of goods and services 
B)  CPP/QPP payments 
C)  the sale of used goods 
D)  Canadian imports of goods and services 
A)  Canadian exports of goods and services 
B)  CPP/QPP payments 
C)  the sale of used goods 
D)  Canadian imports of goods and services A

Question 4

According to the simple circular-flow model, what 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 5

Which of the following best defines a transfer payment?

Accepted Answer

A)  government spending on imported goods 
B)  money that Canadian citizens working abroad send back to their families in Canada 
C)  payments to governments, other than taxes 
D)  a form of government spending that is not made in exchange for a currently produced good or service 
A)  government spending on imported goods 
B)  money that Canadian citizens working abroad send back to their families in Canada 
C)  payments to governments, other than taxes 
D)  a form of government spending that is not made in exchange for a currently produced good or service

Question 6

What is the goal of macroeconomics?

Accepted Answer

A)  to explain how economic changes affect prices of particular goods 
B)  to explain market failures, such as externalities and monopoly 
C)  to explain changes that affect the economy as a whole 
D)  to explain how an income tax influences a person's decision to work 
A)  to explain how economic changes affect prices of particular goods 
B)  to explain market failures, such as externalities and monopoly 
C)  to explain changes that affect the economy as a whole 
D)  to explain how an income tax influences a person's decision to work

Question 7

Which of the following is included in the investment component of GDP?

Accepted Answer

A)  purchases of previously owned homes 
B)  purchases of government bonds 
C)  purchases of new cars 
D)  purchases of new houses 
A)  purchases of previously owned homes 
B)  purchases of government bonds 
C)  purchases of new cars 
D)  purchases of new houses

Question 8

What government level(s) will be considered when computing government purchases for GDP accounting purposes?

Accepted Answer

A)  the federal government only 
B)  provincial and federal governments only 
C)  local, provincial, and federal governments 
D)  local and provincial governments only 
A)  the federal government only 
B)  provincial and federal governments only 
C)  local, provincial, and federal governments 
D)  local and provincial governments only

Question 9

Macroeconomic statistics include the inflation rate, the unemployment rate, GDP, and retail sales.

Accepted Answer

A) True 
 B)False

Question 10

Which headline would be most closely related to what macroeconomists study?

Accepted Answer

A)  The unemployment rate decreases from 6 percent to 5 percent. 
B)  The price of gasoline rises due to reduced output in the Middle East. 
C)  The number of people living on the streets has increased over the past decade. 
D)  The government introduces regulations to keep the telecommunications industry competitive. 
A)  The unemployment rate decreases from 6 percent to 5 percent. 
B)  The price of gasoline rises due to reduced output in the Middle East. 
C)  The number of people living on the streets has increased over the past decade. 
D)  The government introduces regulations to keep the telecommunications industry competitive.

Question 11

Which topics are studied in macroeconomics?

Accepted Answer

A)  unemployment, government spending, and interest rates 
B)  postsecondary education, wage differences between genders, and health care costs 
C)  differences in market structure and competition laws 
D)  the effect of exchange rates on prices and patterns of international trade 
A)  unemployment, government spending, and interest rates 
B)  postsecondary education, wage differences between genders, and health care costs 
C)  differences in market structure and competition laws 
D)  the effect of exchange rates on prices and patterns of international trade

Question 12

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 13

-Refer to Table 5-1. What can we conclude about real GDP from this information?

Accepted Answer

A)  Real GDP was higher in 2020 than in 2019, and real GDP in 2019 was higher than in 2018. 
B)  Real GDP was higher in 2020 than in 2018, and real GDP in 2019 was higher than in 2020. 
C)  Real GDP was higher in 2018 than in 2019, and real GDP in 2019 was higher than in 2020. 
D)  Real GDP was higher in 2018 than in 2019, and real GDP in 2020 was higher than in 2019. 
A)  Real GDP was higher in 2020 than in 2019, and real GDP in 2019 was higher than in 2018. 
B)  Real GDP was higher in 2020 than in 2018, and real GDP in 2019 was higher than in 2020. 
C)  Real GDP was higher in 2018 than in 2019, and real GDP in 2019 was higher than in 2020. 
D)  Real GDP was higher in 2018 than in 2019, and real GDP in 2020 was higher than in 2019.

Question 14

A farmer produces the same output in 2020 as in 2019. His input prices increase by 3 percent and so does his product price. Which inflation rate makes the farmer as well off in 2020 as in 2019?

Accepted Answer

A)  0 percent 
B)  1 percent 
C)  3 percent 
D)  6 percent 
A)  0 percent 
B)  1 percent 
C)  3 percent 
D)  6 percent

Question 15

In a given year, an economy has consumption of $6000, investment of $4000, government purchases of $3500, exports of $1500, imports of $1600, taxes of $1200, transfer payments of $1400, and depreciation of $1300. What is the GDP?

Accepted Answer

A)  $11,200 
B)  $13,400 
C)  $14,600 
D)  $17,300 
A)  $11,200 
B)  $13,400 
C)  $14,600 
D)  $17,300

Question 16

What was the approximate GDP per person in Canada in 2018?

Accepted Answer

A)  $42,000 
B)  $52,000 
C)  $60,000 
D)  $72,000 
A)  $42,000 
B)  $52,000 
C)  $60,000 
D)  $72,000

Question 17

If a Canadian citizen buys a smart phone made in China by a Chinese firm, what is the impact on net exports and GDP?

Accepted Answer

A)  Canadian net exports and Canadian GDP decrease. 
B)  Canadian net exports are unaffected, but Canadian GDP decreases. 
C)  Canadian net exports and Canadian GDP are unaffected. 
D)  Canadian net exports decrease, but Canadian GDP is unaffected. 
A)  Canadian net exports and Canadian GDP decrease. 
B)  Canadian net exports are unaffected, but Canadian GDP decreases. 
C)  Canadian net exports and Canadian GDP are unaffected. 
D)  Canadian net exports decrease, but Canadian GDP is unaffected.

Question 18

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.

Question 19

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). What is included in GDP?

Accepted Answer

A)  The rent was included in GDP; the purchases of the condominiums are not included. 
B)  The rent was included in GDP, and so is the purchase of the condominiums. 
C)  The rent was not included in GDP; the purchases of the condominiums are included. 
D)  The rent was not included in GDP; the purchases are not included either. 
A)  The rent was included in GDP; the purchases of the condominiums are not included. 
B)  The rent was included in GDP, and so is the purchase of the condominiums. 
C)  The rent was not included in GDP; the purchases of the condominiums are included. 
D)  The rent was not included in GDP; the purchases are not included either.

Question 20

Melissa is a Canadian resident. In a typical year, she receives wages from a local employer and dividends from owning shares in some foreign companies. How do these incomes contribute to Canadian GDP?

Accepted Answer

The rationale for the equivalence betwee

How is a potato treated in GDP terms?

Joao used to volunteer to cut his elderly neighbour's grass, but now his neighbour pays a company to do it. How does this change affect GDP?

Which of the following is included in Canadian GDP?

According to the simple circular-flow model, what do firms buy from households?

Which of the following best defines a transfer payment?

What is the goal of macroeconomics?

Which of the following is included in the investment component of GDP?

What government level(s) will be considered when computing government purchases for GDP accounting purposes?

Macroeconomic statistics include the inflation rate, the unemployment rate, GDP, and retail sales.

Which headline would be most closely related to what macroeconomists study?

Which topics are studied in macroeconomics?

What is the GDP deflator?

-Refer to Table 5-1. What can we conclude about real GDP from this information?

A farmer produces the same output in 2020 as in 2019. His input prices increase by 3 percent and so does his product price. Which inflation rate makes the farmer as well off in 2020 as in 2019?

In a given year, an economy has consumption of $6000, investment of $4000, government purchases of $3500, exports of $1500, imports of $1600, taxes of $1200, transfer payments of $1400, and depreciation of $1300. What is the GDP?

What was the approximate GDP per person in Canada in 2018?

If a Canadian citizen buys a smart phone made in China by a Chinese firm, what is the impact on net exports and GDP?

With respect to GDP, how is unemployment compensation treated?

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). What is included in GDP?

Melissa is a Canadian resident. In a typical year, she receives wages from a local employer and dividends from owning shares in some foreign companies. How do these incomes contribute to Canadian GDP?

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 Policy on Aggregate Demand

The Influence of 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 a potato treated in GDP terms?

Joao used to volunteer to cut his elderly neighbour's grass, but now his neighbour pays a company to do it. How does this change affect GDP?

Which of the following is included in Canadian GDP?

According to the simple circular-flow model, what do firms buy from households?

Which of the following best defines a transfer payment?

What is the goal of macroeconomics?

Which of the following is included in the investment component of GDP?

What government level(s) will be considered when computing government purchases for GDP accounting purposes?

Macroeconomic statistics include the inflation rate, the unemployment rate, GDP, and retail sales.

Which headline would be most closely related to what macroeconomists study?

Which topics are studied in macroeconomics?

What is the GDP deflator?

-Refer to Table 5-1. What can we conclude about real GDP from this information?

A farmer produces the same output in 2020 as in 2019. His input prices increase by 3 percent and so does his product price. Which inflation rate makes the farmer as well off in 2020 as in 2019?

In a given year, an economy has consumption of $6000, investment of $4000, government purchases of $3500, exports of $1500, imports of $1600, taxes of $1200, transfer payments of $1400, and depreciation of $1300. What is the GDP?

What was the approximate GDP per person in Canada in 2018?

If a Canadian citizen buys a smart phone made in China by a Chinese firm, what is the impact on net exports and GDP?

With respect to GDP, how is unemployment compensation treated?

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). What is included in GDP?

Melissa is a Canadian resident. In a typical year, she receives wages from a local employer and dividends from owning shares in some foreign companies. How do these incomes contribute to Canadian GDP?

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 Policy on Aggregate Demand

The Influence of Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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