Question 1

One problem with using market values to measure GDP is that

Accepted Answer

A) you cannot compare completely heterogeneous goods by using their dollar values. 
B) some useful goods and services are not sold in markets. 
C) prices for some goods change every year. 
D) market values of export goods are usually priced in foreign currencies. 
A) you cannot compare completely heterogeneous goods by using their dollar values. 
B) some useful goods and services are not sold in markets. 
C) prices for some goods change every year. 
D) market values of export goods are usually priced in foreign currencies. B

Question 2

Assume that the municipal government of Winnipeg,Manitoba,has taxes of $1000,transfer payments of $400,and interest payments on the government debt of $100.If government purchases of goods and services are $300

Accepted Answer

A) government saving will be $100. 
B) government saving will be $500. 
C) government saving will be $200. 
D) the government will not have any saving. 
A) government saving will be $100. 
B) government saving will be $500. 
C) government saving will be $200. 
D) the government will not have any saving. C

Question 3

Nations such as Egypt and Turkey have wide differences between GNP and GDP because both countries

Accepted Answer

A) have a high level of imports and exports relative to GNP. 
B) have a large portion of their GNP produced by multinational corporations. 
C) have a large number of citizens working abroad. 
D) purchase large amounts of military wares from other countries. 
A) have a high level of imports and exports relative to GNP. 
B) have a large portion of their GNP produced by multinational corporations. 
C) have a large number of citizens working abroad. 
D) purchase large amounts of military wares from other countries. C

Question 4

The country of Old Jersey produces milk and butter,and it has published the following macroeconomic data,where quantities are in gallons and prices are dollars per gallon:
$$\begin{array} { l c r c c } 
& 2000 &&{ 2001 } \
\hline \text { Good } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Milk } & 500 & \$ 2 & 900 & \$ 3 \
\text { Butter } & 2000 & \$ 1 & 3000 & \$ 2 \
\hline
\end{array}$$
Between 2000 and 2001,the percent change in the price level as measured by a variable-weight price index was

Accepted Answer

A) 60.00%. 
B) 81.25%. 
C) 83.33%. 
D) 123.08%. 
A) 60.00%. 
B) 81.25%. 
C) 83.33%. 
D) 123.08%.

Question 5

Which of the following is NOT a consequence of the CPI bias?

Accepted Answer

A) The state of the economy will be understated. 
B) The CPI-indexed government transfer payments will be higher than the amount planned. 
C) The monetary policy that targets inflation will need to adjust for the CPI bias. 
D) The economic growth rate will be biased upward. 
A) The state of the economy will be understated. 
B) The CPI-indexed government transfer payments will be higher than the amount planned. 
C) The monetary policy that targets inflation will need to adjust for the CPI bias. 
D) The economic growth rate will be biased upward.

Question 6

The fundamental identity of national income accounting tells us that

Accepted Answer

A) total production = total income = total expenditure. 
B) total production = total income - total expenditure. 
C) total production = total income + total expenditure. 
D) total production < total income + total expenditure. 
A) total production = total income = total expenditure. 
B) total production = total income - total expenditure. 
C) total production = total income + total expenditure. 
D) total production < total income + total expenditure.

Question 7

In the country of Kwaki,people produce canoes,fish for salmon,and grow corn.In 2002 they produced 5000 canoes using labour and natural materials only,but sold only 4000,as the economy entered a recession.The cost of producing each canoe was $1000,but the ones that sold were priced at $1250.They fished $30 million worth of salmon.They used $3 million of the salmon as fertilizer for corn.They grew and ate $55 million of corn.What was Kwaki's GDP in 2002?

Accepted Answer

Inventories are valued at the cost of pr

Question 8

Consider that a consumer likes chicken and beef equally well and in the base year consumes equal amounts of each.If the price of chicken rises sharply next year,she will eat beef almost exclusively.The official CPI,which uses the base year basket as a measure the cost of living,will

Accepted Answer

A) be biased upward. 
B) be biased downward. 
C) underestimate the true cost of living. 
D) reflect the true changes in the cost of living. 
A) be biased upward. 
B) be biased downward. 
C) underestimate the true cost of living. 
D) reflect the true changes in the cost of living.

Question 9

On January 1,2001,the GDP deflator for Old York was 300,and on January 1,2003,the GDP deflator had risen to 330.75.Based on this information,the annual average inflation rate for the two years was

Accepted Answer

A) 5%. 
B) 5.125%. 
C) 10%. 
D) 10.25%. 
A) 5%. 
B) 5.125%. 
C) 10%. 
D) 10.25%.

Question 10

Carl's Computer Centre sells computers to business firms.Businesses then use the computers to produce other goods and services.Over the past year,sales representatives were paid $3.5 million,$0.5 million went for taxes,$0.5 million was profit for Carl,and $10 million was paid for computers at the wholesale level.What was the firm's total contribution to GDP?

Accepted Answer

$4.5 million.Note that the $10 million p

Question 11

If nominal GDP in 2015 exceeds real GDP in 2015,then we know with certainty that

Accepted Answer

A) the price level in 2015 is less than the price level in the base year. 
B) real GDP in 2015 is less than real GDP in the base year. 
C) real GDP in 2015 is equal to the real GDP in the base year. 
D) the price level in 2015 is greater than the price level in the base year. 
A) the price level in 2015 is less than the price level in the base year. 
B) real GDP in 2015 is less than real GDP in the base year. 
C) real GDP in 2015 is equal to the real GDP in the base year. 
D) the price level in 2015 is greater than the price level in the base year.

Question 12

The expected real interest rate 7 is equal to

Accepted Answer

A) nominal interest rate minus inflation rate. 
B) nominal interest rate minus expected inflation rate. 
C) expected nominal interest rate minus inflation rate. 
D) nominal interest rate plus expected inflation rate. 
A) nominal interest rate minus inflation rate. 
B) nominal interest rate minus expected inflation rate. 
C) expected nominal interest rate minus inflation rate. 
D) nominal interest rate plus expected inflation rate.

Question 13

The country of Myrule has produced the following quantity of gauges and potatoes,with the price of each listed in dollar terms:
 $$\begin{array} { l c c c c } 
& 2001 && { 2002 } \
\hline \text { Good } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Gauges } & 8000 & \$ 4 & 10000 & \$ 3 \
\text { Potatoes } & 6000 & \$ 8 & 5000 & \$ 14 \
\hline
\end{array}$$ 
a.Using 2001 as the base year,what are the price indexes for 2001 and 2002?
b.What is the inflation rate using this index?
c.What is the percent change in real output using this index?

Accepted Answer

a.2001 price index = 1.00
2002 price ind

Question 14

If GDP in an economy is greater than its GNP,it means that

Accepted Answer

A) net factor payment from abroad is positive. 
B) net factor payment from abroad is negative. 
C) net factor payment from abroad is zero. 
D) there is a measurement error. 
A) net factor payment from abroad is positive. 
B) net factor payment from abroad is negative. 
C) net factor payment from abroad is zero. 
D) there is a measurement error.

Question 15

Inventories are

Accepted Answer

A) included in the measurement of capital goods. 
B) included in the measurements of intermediate goods. 
C) fully included in annual measurements of GDP. 
D) included in measurements of GDP only if they have changed from the preceding year. 
A) included in the measurement of capital goods. 
B) included in the measurements of intermediate goods. 
C) fully included in annual measurements of GDP. 
D) included in measurements of GDP only if they have changed from the preceding year.

Question 16

The three approaches to measuring economic activity are the

Accepted Answer

A) cost,income,and expenditure approaches. 
B) product,income,and expenditure approaches. 
C) consumer,business,and government approaches. 
D) private,public,and international approaches. 
A) cost,income,and expenditure approaches. 
B) product,income,and expenditure approaches. 
C) consumer,business,and government approaches. 
D) private,public,and international approaches.

Question 17

Explain three consequences of the CPI biases.

Accepted Answer

1.CPI is overestimated because it does n

Question 18

Capital goods are

Accepted Answer

A) not counted in the GDP as final goods. 
B) not used to produce other goods. 
C) used up in the same period that they are produced. 
D) goods used to produce other goods. 
A) not counted in the GDP as final goods. 
B) not used to produce other goods. 
C) used up in the same period that they are produced. 
D) goods used to produce other goods.

Question 19

In the expenditure approach to GDP,which of the following would be excluded from measurements of GDP?

Accepted Answer

A) government payments for goods produced by foreign firms 
B) government payments for goods produced by firms owned by state or local governments 
C) government payments for welfare 
D) All government payments are included in GDP. 
A) government payments for goods produced by foreign firms 
B) government payments for goods produced by firms owned by state or local governments 
C) government payments for welfare 
D) All government payments are included in GDP.

Question 20

The measurement of GDP includes

Accepted Answer

A) nonmarket goods such as homemaking and child-rearing. 
B) the benefits of clean air and water. 
C) estimated values of activity in the underground economy. 
D) purchases and sales of goods produced in previous periods. 
A) nonmarket goods such as homemaking and child-rearing. 
B) the benefits of clean air and water. 
C) estimated values of activity in the underground economy. 
D) purchases and sales of goods produced in previous periods.

One problem with using market values to measure GDP is that

Assume that the municipal government of Winnipeg,Manitoba,has taxes of $1000,transfer payments of $400,and interest payments on the government debt of $100.If government purchases of goods and services are $300

Nations such as Egypt and Turkey have wide differences between GNP and GDP because both countries

Which of the following is NOT a consequence of the CPI bias?

The fundamental identity of national income accounting tells us that

Consider that a consumer likes chicken and beef equally well and in the base year consumes equal amounts of each.If the price of chicken rises sharply next year,she will eat beef almost exclusively.The official CPI,which uses the base year basket as a measure the cost of living,will

On January 1,2001,the GDP deflator for Old York was 300,and on January 1,2003,the GDP deflator had risen to 330.75.Based on this information,the annual average inflation rate for the two years was

If nominal GDP in 2015 exceeds real GDP in 2015,then we know with certainty that

The expected real interest rate 7 is equal to

If GDP in an economy is greater than its GNP,it means that

Inventories are

The three approaches to measuring economic activity are the

Explain three consequences of the CPI biases.

Capital goods are

In the expenditure approach to GDP,which of the following would be excluded from measurements of GDP?

The measurement of GDP includes

Introduction to Macroeconomics

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lm-Fe Model: a General Framework for Macroeconomic Analysis

Exchange Rates, business Cycles, and Macroeconomic Policy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Keynesian Business Cycle Analysis: Non Market Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters

Exam 2: The Measurement and Structure of the Canadian Economy

One problem with using market values to measure GDP is that

Assume that the municipal government of Winnipeg,Manitoba,has taxes of $1000,transfer payments of $400,and interest payments on the government debt of $100.If government purchases of goods and services are $300

Nations such as Egypt and Turkey have wide differences between GNP and GDP because both countries

Which of the following is NOT a consequence of the CPI bias?

The fundamental identity of national income accounting tells us that

Consider that a consumer likes chicken and beef equally well and in the base year consumes equal amounts of each.If the price of chicken rises sharply next year,she will eat beef almost exclusively.The official CPI,which uses the base year basket as a measure the cost of living,will

On January 1,2001,the GDP deflator for Old York was 300,and on January 1,2003,the GDP deflator had risen to 330.75.Based on this information,the annual average inflation rate for the two years was

If nominal GDP in 2015 exceeds real GDP in 2015,then we know with certainty that

The expected real interest rate 7 is equal to

If GDP in an economy is greater than its GNP,it means that

Inventories are

The three approaches to measuring economic activity are the

Explain three consequences of the CPI biases.

Capital goods are

In the expenditure approach to GDP,which of the following would be excluded from measurements of GDP?

The measurement of GDP includes

Introduction to Macroeconomics

Productivity, output, and Employment

Consumption, saving, and Investment

Saving and Investment in the Open Economy

Long-Run Economic Growth

The Asset Market, money, and Prices

Business Cycles

The Is-Lm-Fe Model: a General Framework for Macroeconomic Analysis

Exchange Rates, business Cycles, and Macroeconomic Policy

Classical Business Cycle Analysis: Market-Clearing Macroeconomics

Keynesian Business Cycle Analysis: Non Market Clearing Macroeconomics

Unemployment and Inflation

Monetary Policy and the Bank of Canada

Government Spending and Its Financing

Filters