Exam 2: The Data of Microeconomics

Real GDP per capita is an imperfect measure of economic well-being because it does not value home production or production in the underground economy, among other factors. Give at least two examples that show why the omission of these types of items will make a difference in evaluating economic well-being. One example should explain how the omissions distort comparisons of economic well-being across countries, and another example should explain how the omission distorts comparisons of economic well-being in the same country over time.

When a firm sells a product out of inventory, GDP:

Assume that the market basket of goods and services purchased in 2014 by the average family in Canada costs $14,000 in 2014 prices, whereas the same basket costs $21,000 in 2019 prices. However, the basket of goods and services actually purchased by the average family in 2019 costs $20,000 in 2019 prices, whereas this same basket would have cost $15,000 in 2014 prices. Given these data, a Laspeyres price index of 2019 prices using 2014 as the base year would be:

All of the following actions are investments in the sense of the term used by macroeconomists except:

A number of statistics are computed to measure the price level, such as the GDP deflator and the CPI. The choice of which of these measures to use depends in many cases on the specific question in which you are interested. For each of the following situations, state whether the CPI or GDP deflator is a more appropriate measure to use and explain why the statistic is preferred. a.You are interested in looking at the impact of higher prices of imported oil in the overall cost of living. b.The government is interested in whether increases in defence spending are affecting the price level. c.An economic consulting firm is investigating the impact on the aggregate price level of more computers and electronic technology used in production.

If the adult population equals 25 million, of which 13 million are employed and 2 million are unemployed, the labour-force participation rate equals _____ percent.

"I like eating mangoes daily, but when their price rises, I switch to papayas." Does this statement support the fact that the CPI overstates inflation? (Assume that mangoes are included in the goods basket used to calculate the CPI, but papayas are not included.)

When bread is baked but put away for later sale, this is called:

If real GDP grew by 6 percent and population grew by 2 percent, then real GDP per person grew by approximately _____ percent.

GNP equals GDP _____ income earned domestically by foreigners _____ income that nationals earn abroad.

If the GDP deflator in 2019 equals 1.25 and nominal GDP in 2019 equals $15 trillion, what is the value of real GDP in 2019?

In the national income accounts, the purchases of durables, nondurables, and services by households are classified as:

The core inflation rate:

Which of the following is a flow variable?

National income differs from net national product by an amount called:

Prices of items included in the CPI are:

Which of the following is a stock variable?

If the number of employed increases while the number of unemployed does not change, the unemployment rate:

An economy's _____ equals its _____.

In Canada since the early 1970s: