Question 1

All figures are in billions of dollars.   Refer to the above information.The gross domestic product is:

Accepted Answer

A) $328 
B) $402 
C) $382 
D) $336 
A) $328 
B) $402 
C) $382 
D) $336

Question 2

When an economy's production capacity is expanding:

Accepted Answer

A) nominal GDP, but not necessarily real GDP, is rising. 
B) net exports is always a positive amount. 
C) disposable income exceeds personal income. 
D) gross investment exceeds depreciation. 
A) nominal GDP, but not necessarily real GDP, is rising. 
B) net exports is always a positive amount. 
C) disposable income exceeds personal income. 
D) gross investment exceeds depreciation.

Question 3

The GDP is the:

Accepted Answer

A) monetary value of all final goods and services produced within a nation in a particular year. 
B) national income minus all non-income charges against output. 
C) monetary value of all economic resources used in producing a year's output. 
D) monetary value of all goods and services, final and intermediate, produced in a specific year. 
A) monetary value of all final goods and services produced within a nation in a particular year. 
B) national income minus all non-income charges against output. 
C) monetary value of all economic resources used in producing a year's output. 
D) monetary value of all goods and services, final and intermediate, produced in a specific year.

Question 4

Which of the following is the first step for deriving real GDP from nominal GDP?

Accepted Answer

A) Finding nominal GDP for each year 
B) Finding real GDP for each year 
C) Computing a price index 
D) Dividing each year's nominal GDP by the price year's price index 
A) Finding nominal GDP for each year 
B) Finding real GDP for each year 
C) Computing a price index 
D) Dividing each year's nominal GDP by the price year's price index

Question 5

Value added refers to:

Accepted Answer

A) any increase in GDP which has been adjusted for adverse environmental effects. 
B) the excess of gross investment over net investment. 
C) the difference between the value of a firm's output and the value of the inputs it has purchased from others. 
D) the portion of any increase in GDP which is caused by inflation as opposed to an increase in real output. 
A) any increase in GDP which has been adjusted for adverse environmental effects. 
B) the excess of gross investment over net investment. 
C) the difference between the value of a firm's output and the value of the inputs it has purchased from others. 
D) the portion of any increase in GDP which is caused by inflation as opposed to an increase in real output.

Question 6

GDP excludes:

Accepted Answer

A) the market value of household production. 
B) the production of illegal goods. 
C) off-the-books production. 
D) all of the above. 
A) the market value of household production. 
B) the production of illegal goods. 
C) off-the-books production. 
D) all of the above.

Question 7

Net exports are:

Accepted Answer

A) that portion of consumption and investment goods sent to other countries. 
B) exports plus imports. 
C) exports less imports. 
D) imports less exports. 
A) that portion of consumption and investment goods sent to other countries. 
B) exports plus imports. 
C) exports less imports. 
D) imports less exports.

Question 8

Tom Atoe grows tomatoes for home consumption.This activity is:

Accepted Answer

A) excluded from GDP in order to avoid double counting. 
B) excluded from GDP because an intermediate good is involved. 
C) productive but is excluded from GDP because no market transaction occurs. 
D) included in GDP because it reflects production. 
A) excluded from GDP in order to avoid double counting. 
B) excluded from GDP because an intermediate good is involved. 
C) productive but is excluded from GDP because no market transaction occurs. 
D) included in GDP because it reflects production.

Question 9

The GDP tends to:

Accepted Answer

A) overstate economic welfare because it does not include certain non-market activities such as the productive work of housewives. 
B) understate economic welfare because it includes expenditures undertaken to offset or correct pollution. 
C) understate economic welfare because it does not take into account increases in leisure. 
D) overstate economic welfare because it does not reflect improvements in product quality. 
A) overstate economic welfare because it does not include certain non-market activities such as the productive work of housewives. 
B) understate economic welfare because it includes expenditures undertaken to offset or correct pollution. 
C) understate economic welfare because it does not take into account increases in leisure. 
D) overstate economic welfare because it does not reflect improvements in product quality.

Question 10

All figures are in billions of dollars.   Refer to the above information.Canadian imports:

Accepted Answer

A) cannot be calculated 
B) are $26. 
C) are $16. 
D) are $11. 
A) cannot be calculated 
B) are $26. 
C) are $16. 
D) are $11.

Question 11

A nation's gross domestic product (GDP):

Accepted Answer

A) is the dollar value of the total output produced within the borders of the nation. 
B) is the dollar value of the total output produced by its citizens, regardless of where they are living. 
C) can be found by summing C + In+ S + Xn. 
D) is always some amount less than its C + Ig+ G + Xn. 
A) is the dollar value of the total output produced within the borders of the nation. 
B) is the dollar value of the total output produced by its citizens, regardless of where they are living. 
C) can be found by summing C + In+ S + Xn. 
D) is always some amount less than its C + Ig+ G + Xn.

Question 12

The value of Canadian imports is:

Accepted Answer

A) added to exports when calculating GDP because imports reflect spending by Canadians. 
B) subtracted from exports when calculating GDP because imports do not entail spending by Canadians. 
C) subtracted from exports when calculating GDP because imports do not entail production in Canada. 
D) added when calculating GDP because imports do not entail production in Canada. 
A) added to exports when calculating GDP because imports reflect spending by Canadians. 
B) subtracted from exports when calculating GDP because imports do not entail spending by Canadians. 
C) subtracted from exports when calculating GDP because imports do not entail production in Canada. 
D) added when calculating GDP because imports do not entail production in Canada.

Question 13

If nominal GDP rises:

Accepted Answer

A) real GDP may either rise or fall. 
B) we can be certain that the price level has risen. 
C) real GDP must fall. 
D) real GDP must also rise. 
A) real GDP may either rise or fall. 
B) we can be certain that the price level has risen. 
C) real GDP must fall. 
D) real GDP must also rise.

Question 14

In an economy, the value of inventories fell from $75 billion in 2012 to $63 billion in 2013.In calculating the total investment for 2013, national income accountants would:

Accepted Answer

A) decrease it by $75 billion. 
B) increase it by $63 billion. 
C) decrease it by $12 billion. 
D) increase it by $138 billion. 
A) decrease it by $75 billion. 
B) increase it by $63 billion. 
C) decrease it by $12 billion. 
D) increase it by $138 billion.

Question 15

Which of the following is a shortcoming(s) of GDP as a measure of total output?

Accepted Answer

A) GDP does not include unpaid work. 
B) GDP does not include activities in the underground economy. 
C) GDP does not capture the full value of improvements in product quality. 
D) All the answer choices are correct. 
A) GDP does not include unpaid work. 
B) GDP does not include activities in the underground economy. 
C) GDP does not capture the full value of improvements in product quality. 
D) All the answer choices are correct.

Question 16

Which of the following is the smallest in terms of dollar amount in Canada?

Accepted Answer

A) disposable income 
B) personal income 
C) gross domestic product 
D) gross national product 
A) disposable income 
B) personal income 
C) gross domestic product 
D) gross national product

Question 17

GDP data are criticized as being inaccurate measures of economic welfare because:

Accepted Answer

A) they do not take into account changes in the amount of leisure. 
B) they do not take into account changes in product quality. 
C) they do not take into account the adverse effects of economic activity on the environment. 
D) all of these. 
A) they do not take into account changes in the amount of leisure. 
B) they do not take into account changes in product quality. 
C) they do not take into account the adverse effects of economic activity on the environment. 
D) all of these.

Question 18

GDP tends to overstate economic well-being because it takes into account:

Accepted Answer

A) all of the illegal activities conducted by organized crime in the economy. 
B) spending on intermediate goods that are used to produce final goods. 
C) health care costs related to the consumption of products with adverse health effects. 
D) the personal labour time that car owners spend working on car repairs and maintenance of their vehicles. 
A) all of the illegal activities conducted by organized crime in the economy. 
B) spending on intermediate goods that are used to produce final goods. 
C) health care costs related to the consumption of products with adverse health effects. 
D) the personal labour time that car owners spend working on car repairs and maintenance of their vehicles.

Question 19

A nation's gross domestic product (GDP) by the expenditure approach:

Accepted Answer

A) can be found by summing C + Ig+ G + Xn. 
B) is the dollar value of the total output produced by its citizens, regardless of where they are living. 
C) can be found by summing C + S + G + Xn. 
D) is always some amount less than its NDI. 
A) can be found by summing C + Ig+ G + Xn. 
B) is the dollar value of the total output produced by its citizens, regardless of where they are living. 
C) can be found by summing C + S + G + Xn. 
D) is always some amount less than its NDI.

Question 20

Durable goods are products with expected lives of less than three years.

Accepted Answer

A) True 
 B)False

Exam 7: Part B: Measuring the Economys Output

All figures are in billions of dollars. Refer to the above information.The gross domestic product is:

When an economy's production capacity is expanding:

The GDP is the:

Which of the following is the first step for deriving real GDP from nominal GDP?

Value added refers to:

GDP excludes:

Net exports are:

Tom Atoe grows tomatoes for home consumption.This activity is:

The GDP tends to:

All figures are in billions of dollars. Refer to the above information.Canadian imports:

A nation's gross domestic product (GDP):

The value of Canadian imports is:

If nominal GDP rises:

In an economy, the value of inventories fell from $75 billion in 2012 to $63 billion in 2013.In calculating the total investment for 2013, national income accountants would:

Which of the following is a shortcoming(s) of GDP as a measure of total output?

Which of the following is the smallest in terms of dollar amount in Canada?

GDP data are criticized as being inaccurate measures of economic welfare because:

GDP tends to overstate economic well-being because it takes into account:

A nation's gross domestic product (GDP) by the expenditure approach:

Durable goods are products with expected lives of less than three years.

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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