Question 1

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

Accepted Answer

A)  the exchange rate 
B)  the labour force participation rate 
C)  the gross domestic product 
D)  the natural rate of unemployment 
A)  the exchange rate 
B)  the labour force participation rate 
C)  the gross domestic product 
D)  the natural rate of unemployment

Question 2

How is a country's wealth related to other measures of well-being such as life expectancy and the Human Development Index (HDI) value?

Accepted Answer

A)  positively with both life expectancy and the HDI value 
B)  unrelated with life expectancy; positively with the HDI value 
C)  negatively with life expectancy; unrelated to the HDI value 
D)  negatively with both life expectancy and the HDI value 
A)  positively with both life expectancy and the HDI value 
B)  unrelated with life expectancy; positively with the HDI value 
C)  negatively with life expectancy; unrelated to the HDI value 
D)  negatively with both life expectancy and the HDI value

Question 3

If real GDP doubles and the GDP deflator doubles, what will happen to nominal GDP?

Accepted Answer

A)  It will stay the same. 
B)  It will double. 
C)  It will triple. 
D)  It will quadruple. 
A)  It will stay the same. 
B)  It will double. 
C)  It will triple. 
D)  It will quadruple.

Question 4

A hypothetical economy produces only two items: maple syrup and trips to a local tourist attraction. Calculate nominal GDP, real GDP, and the GDP deflator, and fill in the corresponding columns in the following table:

Accepted Answer

a. Nominal GDP = Sum of current prices ×

Question 5

Hank, a British citizen, only works in Canada. How does the value added to production from his employment impact the GDP of both countries?

Accepted Answer

A)  It raises both Canadian and British GDP. 
B)  It raises Canadian GDP and lowers British GDP. 
C)  It raises Canadian GDP and British GDP is unaffected. 
D)  It lowers Canadian GDP and raises British GDP. 
A)  It raises both Canadian and British GDP. 
B)  It raises Canadian GDP and lowers British GDP. 
C)  It raises Canadian GDP and British GDP is unaffected. 
D)  It lowers Canadian GDP and raises British GDP.

Question 6

Which nonmarket good or service is included as an estimate in Canadian GDP?

Accepted Answer

A)  the value of unpaid child care 
B)  the value of clothes made by a parent for their child 
C)  the estimated rental value of owner-occupied homes 
D)  the estimated value of volunteer work 
A)  the value of unpaid child care 
B)  the value of clothes made by a parent for their child 
C)  the estimated rental value of owner-occupied homes 
D)  the estimated value of volunteer work

Question 7

In a simple circular-flow diagram, why is total income equal to total expenditure?

Accepted Answer

A)  because firms re-invest their profits 
B)  because savings are small 
C)  because income from interest is not part of GDP 
D)  because every transaction has a buyer and a seller 
A)  because firms re-invest their profits 
B)  because savings are small 
C)  because income from interest is not part of GDP 
D)  because every transaction has a buyer and a seller

Question 8

If the current GDP deflator is 150 and last year's deflator was 120, what is the inflation rate?

Accepted Answer

A)  0.25% 
B)  25% 
C)  30% 
D)  270% 
A)  0.25% 
B)  25% 
C)  30% 
D)  270%

Question 9

Which statement best represents a transfer payment?

Accepted Answer

A)  You transfer $1000 from your bank account to a mutual fund. 
B)  The bank transfers $10 quarterly interest to your savings account. 
C)  The government sends your grandfather his pension cheque. 
D)  Your employer automatically transfers $100 each month from your wages to a nontaxable medical spending account. 
A)  You transfer $1000 from your bank account to a mutual fund. 
B)  The bank transfers $10 quarterly interest to your savings account. 
C)  The government sends your grandfather his pension cheque. 
D)  Your employer automatically transfers $100 each month from your wages to a nontaxable medical spending account.

Question 10

In 2018, how large were Canadian government purchases of goods and services?

Accepted Answer

A)  larger than consumption, but smaller than investment 
B)  larger than investment, but smaller than consumption 
C)  smaller than both consumption and investment 
D)  larger than both consumption and investment 
A)  larger than consumption, but smaller than investment 
B)  larger than investment, but smaller than consumption 
C)  smaller than both consumption and investment 
D)  larger than both consumption and investment

Question 11

Alcestis and her family are the only inhabitants of Elafonisos, a small island off the coast of Greece. She only produces fresh fish, which she can sell to clients from nearby islands for 2 euros per kilo. Last year, Alcestis caught 800 kg of fish; she consumed 50 kg and sold the remaining 750 kg for €1500. She used €1000 to buy food and clothing, and she used the remaining €500 for a new fishing boat that she bought from another island. Calculate the following for Elafonisos:
a) GDP, as the value of production
b) Consumption
c) Investment
d) Exports
e) Imports
f) Net Exports
g) GDP, as total expenditure

Accepted Answer

a) GDP = 800 × 2= €1,600
b) Consumption

Question 12

In order to include many different products in an aggregate measure, how is GDP computed?

Accepted Answer

A)  using values of goods based on consumers' tastes 
B)  using primarily costs of production 
C)  using primarily market prices 
D)  using weights that are computed by how much of a particular good is produced relative to total output 
A)  using values of goods based on consumers' tastes 
B)  using primarily costs of production 
C)  using primarily market prices 
D)  using weights that are computed by how much of a particular good is produced relative to total output

Question 13

If the current GDP deflator is 150 and last year's deflator was 125, what is the inflation rate?

Accepted Answer

A)  0.2% 
B)  20% 
C)  25% 
D)  275% 
A)  0.2% 
B)  20% 
C)  25% 
D)  275%

Question 14

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 15

The basic tools of supply and demand analysis are as central to macroeconomic analysis as they are to microeconomic analysis.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is the best definition of GDP?

Accepted Answer

A)  the market value of all goods produced within a country 
B)  the market value of all final goods and services produced by the citizens of a country 
C)  the market value of all final goods and services consumed within a country over a number of years 
D)  the market value of all final goods and services produced within a country in a given period of time 
A)  the market value of all goods produced within a country 
B)  the market value of all final goods and services produced by the citizens of a country 
C)  the market value of all final goods and services consumed within a country over a number of years 
D)  the market value of all final goods and services produced within a country in a given period of time

Question 17

Which of the following would directly increase the value of GDP?

Accepted Answer

A)  an increase in leisure 
B)  a decrease in pollution 
C)  an increase in production 
D)  a decrease in the gap between the richest and poorest 
A)  an increase in leisure 
B)  a decrease in pollution 
C)  an increase in production 
D)  a decrease in the gap between the richest and poorest

Question 18

Which market is the model of supply and demand most appropriate for?

Accepted Answer

A)  markets in which there is one large seller and many buyers 
B)  markets in which there is one large buyer and many sellers 
C)  markets in which there are few sellers and few buyers 
D)  markets in which there are many sellers and many buyers 
A)  markets in which there is one large seller and many buyers 
B)  markets in which there is one large buyer and many sellers 
C)  markets in which there are few sellers and few buyers 
D)  markets in which there are many sellers and many buyers

Question 19

Which of the following is a macroeconomic issue?

Accepted Answer

A)  how much more consumers purchase when the prices of necessities decrease 
B)  how changes in interest rates affect investment 
C)  how an increase in wages changes how many hours a person is willing to work 
D)  how an increase in the amount of competition leads to a decrease in prices 
A)  how much more consumers purchase when the prices of necessities decrease 
B)  how changes in interest rates affect investment 
C)  how an increase in wages changes how many hours a person is willing to work 
D)  how an increase in the amount of competition leads to a decrease in prices

Question 20

Which example would be included in Canadian consumption?

Accepted Answer

A)  A Canadian resident buys a car manufactured in Brazil. 
B)  A French resident buys a new house in Canada 
C)  Beverly buys a newly issued share in a Canadian corporation 
D)  Samantha produces some artwork to decorate her house. 
A)  A Canadian resident buys a car manufactured in Brazil. 
B)  A French resident buys a new house in Canada 
C)  Beverly buys a newly issued share in a Canadian corporation 
D)  Samantha produces some artwork to decorate her house.

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

How is a country's wealth related to other measures of well-being such as life expectancy and the Human Development Index (HDI) value?

If real GDP doubles and the GDP deflator doubles, what will happen to nominal GDP?

A hypothetical economy produces only two items: maple syrup and trips to a local tourist attraction. Calculate nominal GDP, real GDP, and the GDP deflator, and fill in the corresponding columns in the following table:

Hank, a British citizen, only works in Canada. How does the value added to production from his employment impact the GDP of both countries?

Which nonmarket good or service is included as an estimate in Canadian GDP?

In a simple circular-flow diagram, why is total income equal to total expenditure?

If the current GDP deflator is 150 and last year's deflator was 120, what is the inflation rate?

Which statement best represents a transfer payment?

In 2018, how large were Canadian government purchases of goods and services?

In order to include many different products in an aggregate measure, how is GDP computed?

If the current GDP deflator is 150 and last year's deflator was 125, what is the inflation rate?

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

The basic tools of supply and demand analysis are as central to macroeconomic analysis as they are to microeconomic analysis.

Which of the following is the best definition of GDP?

Which of the following would directly increase the value of GDP?

Which market is the model of supply and demand most appropriate for?

Which of the following is a macroeconomic issue?

Which example would be included in Canadian consumption?

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

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

How is a country's wealth related to other measures of well-being such as life expectancy and the Human Development Index (HDI) value?

If real GDP doubles and the GDP deflator doubles, what will happen to nominal GDP?

A hypothetical economy produces only two items: maple syrup and trips to a local tourist attraction. Calculate nominal GDP, real GDP, and the GDP deflator, and fill in the corresponding columns in the following table:

Hank, a British citizen, only works in Canada. How does the value added to production from his employment impact the GDP of both countries?

Which nonmarket good or service is included as an estimate in Canadian GDP?

In a simple circular-flow diagram, why is total income equal to total expenditure?

If the current GDP deflator is 150 and last year's deflator was 120, what is the inflation rate?

Which statement best represents a transfer payment?

In 2018, how large were Canadian government purchases of goods and services?

In order to include many different products in an aggregate measure, how is GDP computed?

If the current GDP deflator is 150 and last year's deflator was 125, what is the inflation rate?

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

The basic tools of supply and demand analysis are as central to macroeconomic analysis as they are to microeconomic analysis.

Which of the following is the best definition of GDP?

Which of the following would directly increase the value of GDP?

Which market is the model of supply and demand most appropriate for?

Which of the following is a macroeconomic issue?

Which example would be included in Canadian consumption?

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

Filters