Question 1

In calculating GDP, governmental transfer payments, such as welfare payments, are:

Accepted Answer

A) not counted. 
B) counted as investment spending. 
C) counted as government spending. 
D) counted as consumption spending. 
A) not counted. 
B) counted as investment spending. 
C) counted as government spending. 
D) counted as consumption spending.

Question 2

Answer the question(s) based on the following data, using year 1 as the base year.All dollars are in billions.   Refer to the above data.Real GDP in year 2 was approximately:

Accepted Answer

A) $3,245 billion. 
B) $3,271 billion. 
C) $3,295 billion. 
D) $3,402 billion. 
A) $3,245 billion. 
B) $3,271 billion. 
C) $3,295 billion. 
D) $3,402 billion.

Question 3

Interest on the public debt is included as a part of government purchases in determining GDP by the expenditures method.

Accepted Answer

A) True 
 B)False

Question 4

The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940); personal consumption expenditures ($4,920); imports ($170); exports ($133); gross investment ($640).What is GDP in this economy?

Accepted Answer

A) $6,463 billion 
B) $6,500 billion 
C) $6,537 billion 
D) $6,633 billion 
A) $6,463 billion 
B) $6,500 billion 
C) $6,537 billion 
D) $6,633 billion

Question 5

The table below indicates the price and output data over a five-year period for an economy that produces only one good.   Refer to the above data.If year 2 is the base year, the price index for year 3 is:

Accepted Answer

A) 120 
B) 125 
C) 133 
D) 150 
A) 120 
B) 125 
C) 133 
D) 150

Question 6

As of the publication date of the text, what years is currently being used by Statistics Canada as the base year for calculating the price index?

Accepted Answer

A) 2001 
B) 2007 
C) 2010 
D) 2017 
A) 2001 
B) 2007 
C) 2010 
D) 2017

Question 7

To calculate the real GDP, Statistics Canada has started to consider both the quantities and prices in the base year and the following year and then average the two.

Accepted Answer

A) True 
 B)False

Question 8

GDP measured using current prices is called:

Accepted Answer

A) nominal GDP. 
B) real GDP. 
C) constant GDP. 
D) deflated GDP. 
A) nominal GDP. 
B) real GDP. 
C) constant GDP. 
D) deflated GDP.

Question 9

(GDP figures are in billions of dollars.)   ]
Refer to the above table.What is the GDP price index in Year 1?

Accepted Answer

A) 105.2 
B) 108.3 
C) 109.6 
D) 111.5 
A) 105.2 
B) 108.3 
C) 109.6 
D) 111.5

Question 10

Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5.The current year per unit prices of these three goods are A = $2, B = $3, and C = $1.Refer to the above information.Nominal GDP in the current year is:

Accepted Answer

A) $110 
B) $115 
C) $45 
D) $90 
A) $110 
B) $115 
C) $45 
D) $90

Question 11

In 1933 net investment was minus $208 million.This meant that:

Accepted Answer

A) gross investment exceeded depreciation by $208 million. 
B) the economy was expanding in that year. 
C) the production of 1933's GDP used up more capital goods than were produced in that year. 
D) the economy produced no capital goods at all in 1933. 
A) gross investment exceeded depreciation by $208 million. 
B) the economy was expanding in that year. 
C) the production of 1933's GDP used up more capital goods than were produced in that year. 
D) the economy produced no capital goods at all in 1933.

Question 12

Value added is the value of a firm's output minus:

Accepted Answer

A) the value of intermediate goods purchased from other firms. 
B) the compensation it pays to employees. 
C) the value of its capital goods. 
D) its depreciation. 
A) the value of intermediate goods purchased from other firms. 
B) the compensation it pays to employees. 
C) the value of its capital goods. 
D) its depreciation.

Question 13

Gross investment refers to:

Accepted Answer

A) private investment minus public investment. 
B) net investment plus replacement investment. 
C) net investment after it has been "inflated" for changes in the price level. 
D) net investment plus net exports. 
A) private investment minus public investment. 
B) net investment plus replacement investment. 
C) net investment after it has been "inflated" for changes in the price level. 
D) net investment plus net exports.

Question 14

The amount of after-tax income received by households is measured by:

Accepted Answer

A) discretionary income. 
B) net domestic income. 
C) disposable income. 
D) personal income. 
A) discretionary income. 
B) net domestic income. 
C) disposable income. 
D) personal income.

Question 15

An example of an intermediate good or service would be:

Accepted Answer

A) bricks bought by a homeowner for constructing a patio. 
B) sacks of groceries bought by a dentist for his family. 
C) a car bought by a household for commuting to work. 
D) a desk bought by an accountant for her office. 
A) bricks bought by a homeowner for constructing a patio. 
B) sacks of groceries bought by a dentist for his family. 
C) a car bought by a household for commuting to work. 
D) a desk bought by an accountant for her office.

Question 16

Assume an economy which is producing only one product.Output and price data for a three-year period are as follows.   Refer to the above data.If year 2 is chosen as the base year, real GDP for year 1 is:

Accepted Answer

A) $25 
B) $100 
C) $50 
D) $80 
A) $25 
B) $100 
C) $50 
D) $80

Question 17

If depreciation (consumption of fixed capital) exceeds gross investment, it can be concluded that:

Accepted Answer

A) nominal GDP is rising but real GDP is declining. 
B) net investment is negative. 
C) the economy is importing more than it exports. 
D) the economy is expanding. 
A) nominal GDP is rising but real GDP is declining. 
B) net investment is negative. 
C) the economy is importing more than it exports. 
D) the economy is expanding.

Question 18

If real GDP falls from one period to another, we can conclude that:

Accepted Answer

A) deflation occurred. 
B) inflation occurred. 
C) nominal GDP fell. 
D) less goods and services have been produced. 
A) deflation occurred. 
B) inflation occurred. 
C) nominal GDP fell. 
D) less goods and services have been produced.

Question 19

If nominal GDP in some year is $280 and real GDP is $160 the GDP price index for that year is:

Accepted Answer

A) 175 
B) 57 
C) 160 
D) 280 
A) 175 
B) 57 
C) 160 
D) 280

Question 20

In determining real GDP economists adjust the nominal GDP by using the:

Accepted Answer

A) national productivity index. 
B) wholesale (producer) price index. 
C) GDP price index. 
D) consumer price index. 
A) national productivity index. 
B) wholesale (producer) price index. 
C) GDP price index. 
D) consumer price index.

Exam 7: Part B: Measuring the Economys Output

In calculating GDP, governmental transfer payments, such as welfare payments, are:

Answer the question(s) based on the following data, using year 1 as the base year.All dollars are in billions. Refer to the above data.Real GDP in year 2 was approximately:

Interest on the public debt is included as a part of government purchases in determining GDP by the expenditures method.

The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940); personal consumption expenditures ($4,920); imports ($170); exports ($133); gross investment ($640).What is GDP in this economy?

The table below indicates the price and output data over a five-year period for an economy that produces only one good. Refer to the above data.If year 2 is the base year, the price index for year 3 is:

As of the publication date of the text, what years is currently being used by Statistics Canada as the base year for calculating the price index?

To calculate the real GDP, Statistics Canada has started to consider both the quantities and prices in the base year and the following year and then average the two.

GDP measured using current prices is called:

(GDP figures are in billions of dollars.) ] Refer to the above table.What is the GDP price index in Year 1?

Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5.The current year per unit prices of these three goods are A = $2, B = $3, and C = $1.Refer to the above information.Nominal GDP in the current year is:

In 1933 net investment was minus $208 million.This meant that:

Value added is the value of a firm's output minus:

Gross investment refers to:

The amount of after-tax income received by households is measured by:

An example of an intermediate good or service would be:

Assume an economy which is producing only one product.Output and price data for a three-year period are as follows. Refer to the above data.If year 2 is chosen as the base year, real GDP for year 1 is:

If depreciation (consumption of fixed capital) exceeds gross investment, it can be concluded that:

If real GDP falls from one period to another, we can conclude that:

If nominal GDP in some year is $280 and real GDP is $160 the GDP price index for that year is:

In determining real GDP economists adjust the nominal GDP by using the:

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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