Question 1

Canada legalized cannabis in 2018. What happened to GDP as a result of this change in the law?

Accepted Answer

A)  it increased 
B)  it decreased 
C)  it did not change because both legal and illegal production are included in GDP 
D)  it did not change because these activities are never included in GDP 
A)  it increased 
B)  it decreased 
C)  it did not change because both legal and illegal production are included in GDP 
D)  it did not change because these activities are never included in GDP

Question 2

Which method of assessing poverty looks at the cost of purchasing a set group of products that would give a modest standard of living?

Accepted Answer

A)  Low Income Cut-offs 
B)  Low Income Measure 
C)  Market Basket Measure 
D)  GDP per capita 
A)  Low Income Cut-offs 
B)  Low Income Measure 
C)  Market Basket Measure 
D)  GDP per capita

Question 3

Suppose Nova Scotia produces only cheese and fish. Last year, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. If in the base year the price of cheese was $10 per unit and the price of fish was $75 per unit, what can we conclude?

Accepted Answer

A)  Nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5 
B)  Nominal GDP is $500, real GDP is $800, and the GDP deflator is 160 
C)  Nominal GDP is $800, real GDP is $500, and the GDP deflator is 160 
D)  Nominal GDP is $800, real GDP is $500, and the GDP deflator is 62.5 
A)  Nominal GDP is $500, real GDP is $800, and the GDP deflator is 62.5 
B)  Nominal GDP is $500, real GDP is $800, and the GDP deflator is 160 
C)  Nominal GDP is $800, real GDP is $500, and the GDP deflator is 160 
D)  Nominal GDP is $800, real GDP is $500, and the GDP deflator is 62.5

Question 4

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). Suppose the value of the condominium owners' housing services is now the same as their former rent. What happens to GDP?

Accepted Answer

A)  GDP necessarily increases. 
B)  GDP necessarily decreases. 
C)  GDP is unaffected because neither the rent nor the estimate of the value of housing services is included in GDP. 
D)  GDP is unaffected because previously rent was included in GDP, and now it is replaced by the estimate of the value of housing services. 
A)  GDP necessarily increases. 
B)  GDP necessarily decreases. 
C)  GDP is unaffected because neither the rent nor the estimate of the value of housing services is included in GDP. 
D)  GDP is unaffected because previously rent was included in GDP, and now it is replaced by the estimate of the value of housing services.

Question 5

A Canadian company owned by a Japanese citizen has opened a Mexican restaurant in France. Where is the profit included?

Accepted Answer

A)  in Mexican GDP 
B)  in Canadian GDP 
C)  in French GDP 
D)  in Japanese GDP 
A)  in Mexican GDP 
B)  in Canadian GDP 
C)  in French GDP 
D)  in Japanese GDP

Question 6

When economists talk about growth in the economy, how do they measure that growth?

Accepted Answer

A)  with the absolute change in nominal GDP 
B)  with the percentage change in real GDP 
C)  with the absolute change in real GDP 
D)  with the percentage change in nominal GDP 
A)  with the absolute change in nominal GDP 
B)  with the percentage change in real GDP 
C)  with the absolute change in real GDP 
D)  with the percentage change in nominal GDP

Question 7

In an economy consisting of only households and firms, how can GDP be computed?

Accepted Answer

A)  by calculating the average total expenditures of households and subtracting savings 
B)  by calculating the average income paid by firms only in exchange for labour 
C)  by adding up either total income paid by firms or total expenditures of households, but not both 
D)  by adding up both the total expenditures of households and the total income paid by firms 
A)  by calculating the average total expenditures of households and subtracting savings 
B)  by calculating the average income paid by firms only in exchange for labour 
C)  by adding up either total income paid by firms or total expenditures of households, but not both 
D)  by adding up both the total expenditures of households and the total income paid by firms

Question 8

Suppose an economy produces only solar panels and wind turbines. Last year, 20 solar panels were sold at $400 per panel and 10 wind turbines were sold at $2000 per turbine. If the price of solar panels was $200 per panel and the price of wind turbines was $1000 per turbine in the base year, what can we conclude?

Accepted Answer

A)  Nominal GDP is $28 000, real GDP is $14 000, and the GDP deflator is 50. 
B)  Nominal GDP is $28 000, real GDP is $14 000, and the GDP deflator is 200. 
C)  Nominal GDP is $14 000, real GDP is $28 000, and the GDP deflator is 200. 
D)  Nominal GDP is $14 000, real GDP is $28 000, and the GDP deflator is 50. 
A)  Nominal GDP is $28 000, real GDP is $14 000, and the GDP deflator is 50. 
B)  Nominal GDP is $28 000, real GDP is $14 000, and the GDP deflator is 200. 
C)  Nominal GDP is $14 000, real GDP is $28 000, and the GDP deflator is 200. 
D)  Nominal GDP is $14 000, real GDP is $28 000, and the GDP deflator is 50.

Question 9

A professional gambler moves from a province where gambling is illegal to a province where gambling is legal. What impact does this move have on Canada's GDP?

Accepted Answer

A)  It raises GDP. 
B)  It decreases GDP. 
C)  It does not change GDP because gambling is never included in GDP. 
D)  It does not change GDP because in either case his income is included. 
A)  It raises GDP. 
B)  It decreases GDP. 
C)  It does not change GDP because gambling is never included in GDP. 
D)  It does not change GDP because in either case his income is included.

Canada legalized cannabis in 2018. What happened to GDP as a result of this change in the law?

Which method of assessing poverty looks at the cost of purchasing a set group of products that would give a modest standard of living?

Suppose Nova Scotia produces only cheese and fish. Last year, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. If in the base year the price of cheese was $10 per unit and the price of fish was $75 per unit, what can we conclude?

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). Suppose the value of the condominium owners' housing services is now the same as their former rent. What happens to GDP?

A Canadian company owned by a Japanese citizen has opened a Mexican restaurant in France. Where is the profit included?

When economists talk about growth in the economy, how do they measure that growth?

In an economy consisting of only households and firms, how can GDP be computed?

A professional gambler moves from a province where gambling is illegal to a province where gambling is legal. What impact does this move have on Canada's 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

Filters

Exam 5: Measuring a Nations Income

Canada legalized cannabis in 2018. What happened to GDP as a result of this change in the law?

Which method of assessing poverty looks at the cost of purchasing a set group of products that would give a modest standard of living?

Suppose Nova Scotia produces only cheese and fish. Last year, 20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each. If in the base year the price of cheese was $10 per unit and the price of fish was $75 per unit, what can we conclude?

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). Suppose the value of the condominium owners' housing services is now the same as their former rent. What happens to GDP?

A Canadian company owned by a Japanese citizen has opened a Mexican restaurant in France. Where is the profit included?

When economists talk about growth in the economy, how do they measure that growth?

In an economy consisting of only households and firms, how can GDP be computed?

A professional gambler moves from a province where gambling is illegal to a province where gambling is legal. What impact does this move have on Canada's 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

Filters