Question 1

Which statement best describes the evolution of the Canadian economy over the past decades?

Accepted Answer

A)  Real GDP in 2018 was less than three times its level in 1970. 
B)  The output of goods and services grew on average about 1 percent per year from 1970 to 2018. 
C)  Real GDP was approximately constant over the past decades, only prices have increased. 
D)  Growth in real GDP has allowed an improvement in Canadians' standard of living. 
A)  Real GDP in 2018 was less than three times its level in 1970. 
B)  The output of goods and services grew on average about 1 percent per year from 1970 to 2018. 
C)  Real GDP was approximately constant over the past decades, only prices have increased. 
D)  Growth in real GDP has allowed an improvement in Canadians' standard of living.

Question 2

An Italian company opens a pasta company in Ottawa. Where are the profits from this pasta company included?

Accepted Answer

A)  in both the Canadian and Italian GDP 
B)  in only the Canadian GDP 
C)  in only the Italian GDP 
D)  in neither the Canadian GDP nor Italian GDP 
A)  in both the Canadian and Italian GDP 
B)  in only the Canadian GDP 
C)  in only the Italian GDP 
D)  in neither the Canadian GDP nor Italian GDP

Question 3

To encourage formation of small businesses, the government could provide subsidies. How would these subsidies be treated?

Accepted Answer

A)  They would be included in GDP because they are part of government expenditures. 
B)  They would be included in GDP because they are part of investment expenditures. 
C)  They would not be included in GDP because they are transfer payments. 
D)  They would not be included in GDP because the government raises taxes to pay for them. 
A)  They would be included in GDP because they are part of government expenditures. 
B)  They would be included in GDP because they are part of investment expenditures. 
C)  They would not be included in GDP because they are transfer payments. 
D)  They would not be included in GDP because the government raises taxes to pay for them.

Question 4

-Refer to Table 5-4. On the basis of the information in the table, which list below contains the correct ordering of GDP per person (from highest to lowest)?

Accepted Answer

A)  P, Q, R 
B)  P, R, Q 
C)  R, P, Q 
D)  R, Q, P 
A)  P, Q, R 
B)  P, R, Q 
C)  R, P, Q 
D)  R, Q, P

Question 5

Income exceeds production.

Accepted Answer

A) True 
 B)False

Question 6

-Refer to Table 5-2. What is the nominal GDP for 2018?

Accepted Answer

A)  $900 
B)  $1000 
C)  $1100 
D)  $1250 
A)  $900 
B)  $1000 
C)  $1100 
D)  $1250

Question 7

What is the difference between nominal and real GDP?

Accepted Answer

A)  Nominal GDP values production at current prices, while real GDP values production at constant prices. 
B)  Nominal GDP values production at constant prices, while real GDP values production at current prices. 
C)  Nominal GDP values production at market prices, while real GDP values production at the cost of the resources used in the production process. 
D)  Nominal GDP consistently underestimates the value of production, while real GDP consistently overestimates the value of production. 
A)  Nominal GDP values production at current prices, while real GDP values production at constant prices. 
B)  Nominal GDP values production at constant prices, while real GDP values production at current prices. 
C)  Nominal GDP values production at market prices, while real GDP values production at the cost of the resources used in the production process. 
D)  Nominal GDP consistently underestimates the value of production, while real GDP consistently overestimates the value of production.

Question 8

The general rule of thumb is that a recession should be at least how many quarters of negative growth?

Accepted Answer

A)  1 
B)  2 
C)  3 
D)  4 
A)  1 
B)  2 
C)  3 
D)  4

Question 9

A country reported a nominal GDP of $85 billion in 2020 and $100 billion in 2019 and reported a GDP deflator of 100 in 2020 and 105 in 2019. What happened to real output and prices from 2019 to 2020?

Accepted Answer

A)  Real output and prices both rose. 
B)  Real output rose and prices fell. 
C)  Real output and prices both fell. 
D)  Real output fell and prices rose. 
A)  Real output and prices both rose. 
B)  Real output rose and prices fell. 
C)  Real output and prices both fell. 
D)  Real output fell and prices rose.

Question 10

How is the value of housing services included in GDP?

Accepted Answer

A)  It is valued as the annual depreciation of the house. 
B)  It is valued as the mortgage payment made on the house. 
C)  It uses the purchase price of the house in the year it is sold. 
D)  It is based on an estimate of its rental value. 
A)  It is valued as the annual depreciation of the house. 
B)  It is valued as the mortgage payment made on the house. 
C)  It uses the purchase price of the house in the year it is sold. 
D)  It is based on an estimate of its rental value.

Question 11

Over the past few decades, Canadians have chosen to cook less at home and eat more at restaurants. How has this practice affected GDP?

Accepted Answer

A)  It has increased measured GDP. 
B)  It has reduced measured GDP. 
C)  It has not affected measured GDP. 
D)  It has had an ambiguous effect on GDP. 
A)  It has increased measured GDP. 
B)  It has reduced measured GDP. 
C)  It has not affected measured GDP. 
D)  It has had an ambiguous effect on GDP.

Question 12

How should Dianne's contributions to GDP be calculated?

Accepted Answer

A)  using her income, not her expenditure 
B)  using her expenditure, not her income 
C)  using both her income and her expenditure 
D)  using either her income or her expenditure, but not both 
A)  using her income, not her expenditure 
B)  using her expenditure, not her income 
C)  using both her income and her expenditure 
D)  using either her income or her expenditure, but not both

Question 13

In Canada, GDP is reported each quarter. How are these numbers computed?

Accepted Answer

A)  These numbers are adjusted to make them measure at annual and seasonally adjusted rates. 
B)  These numbers are adjusted to make them annual rates, but no adjustment for seasonal variations is made. 
C)  These numbers are quarterly rates that have been seasonally adjusted. 
D)  These numbers are at quarterly rates and have not been seasonally adjusted. 
A)  These numbers are adjusted to make them measure at annual and seasonally adjusted rates. 
B)  These numbers are adjusted to make them annual rates, but no adjustment for seasonal variations is made. 
C)  These numbers are quarterly rates that have been seasonally adjusted. 
D)  These numbers are at quarterly rates and have not been seasonally adjusted.

Question 14

A country reported a nominal GDP of $115 billion in 2020 and $125 billion in 2019 and reported a GDP deflator of 85 in 2020 and 100 in 2019. What happened to real output and prices from 2019 to 2020?

Accepted Answer

A)  Real output and prices both rose. 
B)  Real output fell and prices rose. 
C)  Real output rose and prices fell. 
D)  Real output and prices both fell. 
A)  Real output and prices both rose. 
B)  Real output fell and prices rose. 
C)  Real output rose and prices fell. 
D)  Real output and prices both fell.

Question 15

Is GDP a good measure of economic well-being?

Accepted Answer

Answers will vary but should include dis

Question 16

-Refer to Table 5-2. Using 2017 as the base year, what can we conclude for 2018?

Accepted Answer

A)  Real GDP is $880, and the GDP deflator is 80. 
B)  Real GDP is $880, and the GDP deflator is 95 
C)  Real GDP is $880, and the GDP deflator is 125 
D)  Real GDP is $950, and the GDP deflator is 95. 
A)  Real GDP is $880, and the GDP deflator is 80. 
B)  Real GDP is $880, and the GDP deflator is 95 
C)  Real GDP is $880, and the GDP deflator is 125 
D)  Real GDP is $950, and the GDP deflator is 95.

Question 17

Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves. What would this change do by itself?

Accepted Answer

A)  It would make GDP fall over time. 
B)  It would not make any change in GDP over time. 
C)  It would make GDP rise over time. 
D)  It would change GDP, but in an uncertain direction. 
A)  It would make GDP fall over time. 
B)  It would not make any change in GDP over time. 
C)  It would make GDP rise over time. 
D)  It would change GDP, but in an uncertain direction.

Question 18

What does the simple circular-flow diagram illustrate?

Accepted Answer

A)  that expenditure generates income so that income and the value of production are equal 
B)  that the economy's income exceeds its expenditure 
C)  that factors of production "flow" from firms to households 
D)  that money "flows" from households to firms 
A)  that expenditure generates income so that income and the value of production are equal 
B)  that the economy's income exceeds its expenditure 
C)  that factors of production "flow" from firms to households 
D)  that money "flows" from households to firms

Question 19

According to research done by Lars Osberg and Andrew Sharpe of the Centre for the Study of Living Standards, which Canadian province had the highest increase in economic well-being between 1981 and 2014?

Accepted Answer

A)  Newfoundland and Labrador 
B)  Ontario 
C)  Alberta 
D)  British Columbia 
A)  Newfoundland and Labrador 
B)  Ontario 
C)  Alberta 
D)  British Columbia

Question 20

If a small country has current nominal GDP of $30 billion and the GDP deflator is 50, what is its real GDP?

Accepted Answer

A)  $15 billion 
B)  $30 billion 
C)  $60 billion 
D)  $150 billion 
A)  $15 billion 
B)  $30 billion 
C)  $60 billion 
D)  $150 billion

Which statement best describes the evolution of the Canadian economy over the past decades?

An Italian company opens a pasta company in Ottawa. Where are the profits from this pasta company included?

To encourage formation of small businesses, the government could provide subsidies. How would these subsidies be treated?

-Refer to Table 5-4. On the basis of the information in the table, which list below contains the correct ordering of GDP per person (from highest to lowest)?

Income exceeds production.

-Refer to Table 5-2. What is the nominal GDP for 2018?

What is the difference between nominal and real GDP?

The general rule of thumb is that a recession should be at least how many quarters of negative growth?

A country reported a nominal GDP of $85 billion in 2020 and $100 billion in 2019 and reported a GDP deflator of 100 in 2020 and 105 in 2019. What happened to real output and prices from 2019 to 2020?

How is the value of housing services included in GDP?

Over the past few decades, Canadians have chosen to cook less at home and eat more at restaurants. How has this practice affected GDP?

How should Dianne's contributions to GDP be calculated?

In Canada, GDP is reported each quarter. How are these numbers computed?

A country reported a nominal GDP of $115 billion in 2020 and $125 billion in 2019 and reported a GDP deflator of 85 in 2020 and 100 in 2019. What happened to real output and prices from 2019 to 2020?

Is GDP a good measure of economic well-being?

-Refer to Table 5-2. Using 2017 as the base year, what can we conclude for 2018?

Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves. What would this change do by itself?

What does the simple circular-flow diagram illustrate?

According to research done by Lars Osberg and Andrew Sharpe of the Centre for the Study of Living Standards, which Canadian province had the highest increase in economic well-being between 1981 and 2014?

If a small country has current nominal GDP of $30 billion and the GDP deflator is 50, what is its real 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

Which statement best describes the evolution of the Canadian economy over the past decades?

An Italian company opens a pasta company in Ottawa. Where are the profits from this pasta company included?

To encourage formation of small businesses, the government could provide subsidies. How would these subsidies be treated?

-Refer to Table 5-4. On the basis of the information in the table, which list below contains the correct ordering of GDP per person (from highest to lowest)?

Income exceeds production.

-Refer to Table 5-2. What is the nominal GDP for 2018?

What is the difference between nominal and real GDP?

The general rule of thumb is that a recession should be at least how many quarters of negative growth?

A country reported a nominal GDP of $85 billion in 2020 and $100 billion in 2019 and reported a GDP deflator of 100 in 2020 and 105 in 2019. What happened to real output and prices from 2019 to 2020?

How is the value of housing services included in GDP?

Over the past few decades, Canadians have chosen to cook less at home and eat more at restaurants. How has this practice affected GDP?

How should Dianne's contributions to GDP be calculated?

In Canada, GDP is reported each quarter. How are these numbers computed?

A country reported a nominal GDP of $115 billion in 2020 and $125 billion in 2019 and reported a GDP deflator of 85 in 2020 and 100 in 2019. What happened to real output and prices from 2019 to 2020?

Is GDP a good measure of economic well-being?

-Refer to Table 5-2. Using 2017 as the base year, what can we conclude for 2018?

Over time, people have come to rely more on market-produced goods and less on goods that they produce for themselves. What would this change do by itself?

What does the simple circular-flow diagram illustrate?

According to research done by Lars Osberg and Andrew Sharpe of the Centre for the Study of Living Standards, which Canadian province had the highest increase in economic well-being between 1981 and 2014?

If a small country has current nominal GDP of $30 billion and the GDP deflator is 50, what is its real 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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