Question 1

Refer to the information below.GDP is: All figures are in billions of dollars.

Accepted Answer

A) $422 
B) $467 
C) $417 
D) $402 
A) $422 
B) $467 
C) $417 
D) $402 A

Question 2

The gross domestic product of Canada measures aggregate output produced:

Accepted Answer

A) within Canada's borders. 
B) by all Canadian companies. 
C) by all Canadian citizens only. 
D) by Canadian companies and citizens only. 
A) within Canada's borders. 
B) by all Canadian companies. 
C) by all Canadian citizens only. 
D) by Canadian companies and citizens only. A

Question 3

In the treatment of Canadian exports and imports, national income accountants:

Accepted Answer

A) subtract exports, but add imports, in calculating GDP. 
B) subtract both exports and imports in calculating GDP. 
C) add both exports and imports in calculating GDP. 
D) add exports, but subtract imports, in calculating GDP. 
A) subtract exports, but add imports, in calculating GDP. 
B) subtract both exports and imports in calculating GDP. 
C) add both exports and imports in calculating GDP. 
D) add exports, but subtract imports, in calculating GDP. D

Question 4

A business buys $5,000 worth of resources to produce a product.The business makes 100 units of the product and each of them sells for $65.The value added by the business to these products is:

Accepted Answer

A) $5,000 
B) $6,500 
C) $1,000 
D) $1,500 
A) $5,000 
B) $6,500 
C) $1,000 
D) $1,500

Question 5

The GDP figure by the income approach will be identical to the GDP by the expenditure approach if we add to the Net Domestic income:

Accepted Answer

A) the capital consumption allowances and the investment income. 
B) the capital consumption allowances and the interest payments to the owners of capital. 
C) the indirect taxes and the capital consumption allowances. 
D) profits of the corporations and the capital consumption allowances. 
A) the capital consumption allowances and the investment income. 
B) the capital consumption allowances and the interest payments to the owners of capital. 
C) the indirect taxes and the capital consumption allowances. 
D) profits of the corporations and the capital consumption allowances.

Question 6

Which of the following of the countries listed and using Image 7.1 Global Perspective, which country had the highest GDP in 2016?

Accepted Answer

A) Japan 
B) Germany 
C) France 
D) United Kingdom 
A) Japan 
B) Germany 
C) France 
D) United Kingdom

Question 7

In an economy experiencing persistent deflation:

Accepted Answer

A) potential GDP will necessarily exceed actual GDP. 
B) changes in nominal GDP may either overstate or understate changes in real GDP. 
C) changes in nominal GDP understate changes in real GDP. 
D) changes in nominal GDP overstate changes in real GDP. 
A) potential GDP will necessarily exceed actual GDP. 
B) changes in nominal GDP may either overstate or understate changes in real GDP. 
C) changes in nominal GDP understate changes in real GDP. 
D) changes in nominal GDP overstate changes in real GDP.

Question 8

GDP includes:

Accepted Answer

A) neither intermediate nor final goods. 
B) both intermediate and final goods. 
C) intermediate, but not final, goods. 
D) final, but not intermediate, goods. 
A) neither intermediate nor final goods. 
B) both intermediate and final goods. 
C) intermediate, but not final, goods. 
D) final, but not intermediate, goods.

Question 9

Gross private domestic investment exceeds depreciation in an economy experiencing expanding production capacity.

Accepted Answer

A) True 
 B)False

Question 10

An increase in inventories during 2022:

Accepted Answer

A) will result in gross investment being higher than net investment by the amount of the inventory increase. 
B) should be ignored while calculating GDP for 2022. 
C) should be subtracted from GDP calculated for 2022. 
D) should be included in GDP calculated for 2022. 
A) will result in gross investment being higher than net investment by the amount of the inventory increase. 
B) should be ignored while calculating GDP for 2022. 
C) should be subtracted from GDP calculated for 2022. 
D) should be included in GDP calculated for 2022.

Question 11

Which would be considered an investment according to economists?

Accepted Answer

A) the purchase of newly-issued shares of stock in Microsoft 
B) the construction of a new computer chip factory by Intel 
C) the purchase of shares of stock by Fidelity, a mutual fund company 
D) the sale of government bonds by the nation's central bank 
A) the purchase of newly-issued shares of stock in Microsoft 
B) the construction of a new computer chip factory by Intel 
C) the purchase of shares of stock by Fidelity, a mutual fund company 
D) the sale of government bonds by the nation's central bank

Question 12

Net exports are negative when:

Accepted Answer

A) a nation's imports exceed its exports. 
B) the economy's stock of capital goods is declining. 
C) depreciation exceeds domestic investment. 
D) a nation's exports exceed its imports. 
A) a nation's imports exceed its exports. 
B) the economy's stock of capital goods is declining. 
C) depreciation exceeds domestic investment. 
D) a nation's exports exceed its imports.

Question 13

By summing the dollar value of all market transactions in the economy we would:

Accepted Answer

A) be determining the market value of all resources used in the production process. 
B) obtain a sum substantially larger than the GDP. 
C) be determining value added for the economy. 
D) be measuring GDP. 
A) be determining the market value of all resources used in the production process. 
B) obtain a sum substantially larger than the GDP. 
C) be determining value added for the economy. 
D) be measuring GDP.

Question 14

Transfer payments are:

Accepted Answer

A) excluded when calculating GDP because they only reflect inflation. 
B) excluded when calculating GDP because they do not reflect current production. 
C) included when calculating GDP because they are a category of investment spending. 
D) included when calculating GDP because they increase the spending of recipients. 
A) excluded when calculating GDP because they only reflect inflation. 
B) excluded when calculating GDP because they do not reflect current production. 
C) included when calculating GDP because they are a category of investment spending. 
D) included when calculating GDP because they increase the spending of recipients.

Question 15

Money spent on the purchase of a new house is included in the GDP as a part of:

Accepted Answer

A) the consumption of private fixed capital. 
B) personal consumption expenditures. 
C) personal saving. 
D) investment. 
A) the consumption of private fixed capital. 
B) personal consumption expenditures. 
C) personal saving. 
D) investment.

Question 16

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:

Accepted Answer

A) may have either increased or decreased. 
B) increased by $65 billion. 
C) increased by $55 billion. 
D) decreased by $55 billion. 
A) may have either increased or decreased. 
B) increased by $65 billion. 
C) increased by $55 billion. 
D) decreased by $55 billion.

Question 17

Suppose ZZZ Corporation issues new common stock worth $25 million in 2020.It uses $18 million of the proceeds to replace obsolete equipment in its factory and $7 million to repay bank loans.As a result, there is an increase in gross investment by:

Accepted Answer

A) $7 million. 
B) $25 million. 
C) $18 million. 
D) $11 million. 
A) $7 million. 
B) $25 million. 
C) $18 million. 
D) $11 million.

Question 18

GDP by the expenditure approach is equal to:

Accepted Answer

A) C + Ig+ G + Xn. 
B) C + Ig+ G - Xn. 
C) C + In+ G + Xn. 
D) C + In+ G - Xn. 
A) C + Ig+ G + Xn. 
B) C + Ig+ G - Xn. 
C) C + In+ G + Xn. 
D) C + In+ G - Xn.

Question 19

In an economy, the value of inventories rose from $100 billion in 2016 to $150 billion in 2017.In calculating the total investment for 2017, national income accountants would:

Accepted Answer

A) decrease it by $50 billion. 
B) increase it by $50 billion. 
C) decrease it by $100 billion. 
D) increase it by $150 billion. 
A) decrease it by $50 billion. 
B) increase it by $50 billion. 
C) decrease it by $100 billion. 
D) increase it by $150 billion.

Question 20

The GDP deflator or price index equals:

Accepted Answer

A) gross private domestic investment less the consumption of fixed capital. 
B) gross national product less net foreign factor income earned in the United States. 
C) nominal GDP divided by real GDP. 
D) real GDP divided by nominal GDP. 
A) gross private domestic investment less the consumption of fixed capital. 
B) gross national product less net foreign factor income earned in the United States. 
C) nominal GDP divided by real GDP. 
D) real GDP divided by nominal GDP.

Exam 7: Part B: Measuring the Economys Output

Refer to the information below.GDP is: All figures are in billions of dollars.

The gross domestic product of Canada measures aggregate output produced:

In the treatment of Canadian exports and imports, national income accountants:

A business buys $5,000 worth of resources to produce a product.The business makes 100 units of the product and each of them sells for $65.The value added by the business to these products is:

The GDP figure by the income approach will be identical to the GDP by the expenditure approach if we add to the Net Domestic income:

Which of the following of the countries listed and using Image 7.1 Global Perspective, which country had the highest GDP in 2016?

In an economy experiencing persistent deflation:

GDP includes:

Gross private domestic investment exceeds depreciation in an economy experiencing expanding production capacity.

An increase in inventories during 2022:

Which would be considered an investment according to economists?

Net exports are negative when:

By summing the dollar value of all market transactions in the economy we would:

Transfer payments are:

Money spent on the purchase of a new house is included in the GDP as a part of:

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:

Suppose ZZZ Corporation issues new common stock worth $25 million in 2020.It uses $18 million of the proceeds to replace obsolete equipment in its factory and $7 million to repay bank loans.As a result, there is an increase in gross investment by:

GDP by the expenditure approach is equal to:

In an economy, the value of inventories rose from $100 billion in 2016 to $150 billion in 2017.In calculating the total investment for 2017, national income accountants would:

The GDP deflator or price index equals:

Part A: Limits, Alternatives, and Choices

Part B: Limits, Alternatives, and Choices

Part A: The Market System and the Circular Flow

Part B: The Market System and the Circular Flow

Part A: Demand, Supply, and Market Equilibrium

Part B: Demand, Supply, and Market Equilibrium

Part A: Market Failures: Public Goods and Externalities

Part B: Market Failures: Public Goods and Externalities

Part A: Governments Role and Government Failure

Part B: Governments Role and Government Failure

Part A: An Introduction to Macroeconomics

Part B: An Introduction to Macroeconomics

Part A: Measuring the Economys Output

Part A: Economic Growth

Part B: Economic Growth

Part A: Business Cycles, Unemployment, and Inflation

Part B: Business Cycles, Unemployment, and Inflation

Part A: Basic Macroeconomic Relationships

Part B: Basic Macroeconomic Relationships

Part A: The Aggregate Expenditures Model

Part B: The Aggregate Expenditures Model

Part A: Aggregate Demand and Aggregate Supply

Part B: Aggregate Demand and Aggregate Supply

Part A: Fiscal Policy, Deficits, Surpluses, and Debt

Part B: Fiscal Policy, Deficits, Surpluses, and Debt

Part A: Money, Banking, and Money Creation

Part B: Money, Banking, and Money Creation

Part A: Interest Rates and Monetary Policy

Part B: Interest Rates and Monetary Policy

Part A: Long-Run Macroeconomic Adjustments

Part B: Long-Run Macroeconomic Adjustments

Part A: International Trade

Part B: International Trade

Part C: Financial Economics

Part A: The Balance of Payments and Exchange Rates

Part B: The Balance of Payments and Exchange Rates

The Economics of Developing Countries

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