Question 1

What is the relationship between income and expenditure for an economy?

Accepted Answer

A)  Income is greater than expenditure. 
B)  Income is less than expenditure. 
C)  Income equals expenditure. 
D)  Income could be greater or less than expenditure. 
A)  Income is greater than expenditure. 
B)  Income is less than expenditure. 
C)  Income equals expenditure. 
D)  Income could be greater or less than expenditure. C

Question 2

In 2014, what were Canadian net exports?

Accepted Answer

A)  negative and about 10 percent of GDP 
B)  positive and about 3 percent of GDP 
C)  negative and about 1 percent of GDP 
D)  positive and about 10 percent of GDP 
A)  negative and about 10 percent of GDP 
B)  positive and about 3 percent of GDP 
C)  negative and about 1 percent of GDP 
D)  positive and about 10 percent of GDP C

Question 3

Which statement supports the idea of using GDP as a measure of well-being?

Accepted Answer

A)  Countries with higher GDP tend to have more luxury cars. 
B)  Countries with higher GDP tend to have more schools. 
C)  Countries with higher GDP tend to have more fast food restaurants. 
D)  Countries with higher GDP tend to have more food. 
A)  Countries with higher GDP tend to have more luxury cars. 
B)  Countries with higher GDP tend to have more schools. 
C)  Countries with higher GDP tend to have more fast food restaurants. 
D)  Countries with higher GDP tend to have more food. B

Question 4

If real GDP doubles and the GDP deflator doubles, what will happen to nominal GDP?

Accepted Answer

A)  It will stay the same. 
B)  It will double. 
C)  It will triple. 
D)  It will quadruple. 
A)  It will stay the same. 
B)  It will double. 
C)  It will triple. 
D)  It will quadruple.

Question 5

According to international studies, larger GDP per person is associated with which other measures of well-being?

Accepted Answer

A)  longer life expectancy and a higher rate of population growth 
B)  longer life expectancy and a higher percentage of the population that is literate 
C)  similar life expectancy and a higher quality of the environment 
D)  similar life expectancy and a higher percentage of the population that is literate 
A)  longer life expectancy and a higher rate of population growth 
B)  longer life expectancy and a higher percentage of the population that is literate 
C)  similar life expectancy and a higher quality of the environment 
D)  similar life expectancy and a higher percentage of the population that is literate

Question 6

Which of the following is counted in GDP?

Accepted Answer

A)  the estimated value of housework 
B)  the value of illegally produced goods and services 
C)  the value of newly issued stocks and bonds 
D)  the estimated value of housing services 
A)  the estimated value of housework 
B)  the value of illegally produced goods and services 
C)  the value of newly issued stocks and bonds 
D)  the estimated value of housing services

Question 7

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). What is included in GDP?

Accepted Answer

A)  The rent was included in GDP; the purchases of the condominiums are not included. 
B)  The rent was included in GDP, and so is the purchase of the condominiums. 
C)  The rent was not included in GDP; the purchases of the condominiums are included. 
D)  The rent was not included in GDP; the purchases are not included either. 
A)  The rent was included in GDP; the purchases of the condominiums are not included. 
B)  The rent was included in GDP, and so is the purchase of the condominiums. 
C)  The rent was not included in GDP; the purchases of the condominiums are included. 
D)  The rent was not included in GDP; the purchases are not included either.

Question 8

Why is GDP computed using market prices as the value of final goods and services?

Accepted Answer

A)  because market prices do not change much, so it is easy to make comparisons between years 
B)  because if market prices are out of line with how people value goods, the government sets ceilings and floors on them 
C)  because costs change too much to reflect the value of goods and services 
D)  because market prices reflect the value of goods and services 
A)  because market prices do not change much, so it is easy to make comparisons between years 
B)  because if market prices are out of line with how people value goods, the government sets ceilings and floors on them 
C)  because costs change too much to reflect the value of goods and services 
D)  because market prices reflect the value of goods and services

Question 9

What is included in GDP?

Accepted Answer

A)  the sale of stocks and bonds 
B)  the estimated rental value of owner-occupied housing 
C)  unpaid production of goods and services at home 
D)  proceeds of a garage sale 
A)  the sale of stocks and bonds 
B)  the estimated rental value of owner-occupied housing 
C)  unpaid production of goods and services at home 
D)  proceeds of a garage sale

Question 10

With respect to GDP, how are welfare payments treated?

Accepted Answer

A)  They are included in GDP because they represent payment for work performed in the past. 
B)  They are included in GDP because they represent potential consumption. 
C)  They are excluded from GDP because they do not represent current government purchases of goods and services. 
D)  They are excluded from GDP because they are not private pensions. 
A)  They are included in GDP because they represent payment for work performed in the past. 
B)  They are included in GDP because they represent potential consumption. 
C)  They are excluded from GDP because they do not represent current government purchases of goods and services. 
D)  They are excluded from GDP because they are not private pensions.

Question 11

-Refer to the Table 5-1. What is the national income for this economy?

Accepted Answer

A)  $175 
B)  $185 
C)  $192 
D)  $215 
A)  $175 
B)  $185 
C)  $192 
D)  $215

Question 12

-Refer to the Table 5-1. What is the disposable personal income for this economy?

Accepted Answer

A)  $124 
B)  $154 
C)  $164 
D)  $170 
A)  $124 
B)  $154 
C)  $164 
D)  $170

Question 13

The local Nissan dealership has an increase in inventory of 25 cars in 2015. How will the sale of all 25 cars in 2016 affect the GDP?

Accepted Answer

A)  The value of the cars will be counted as part of GDP in 2015 but not in 2016. 
B)  The value of the cars will not affect the 2015 GDP, but will be included in 2016 GDP. 
C)  The value of the cars will be included in both 2015 and 2016 GDP. 
D)  The value of the cars will not be included in GDP in 2015 or 2016. 
A)  The value of the cars will be counted as part of GDP in 2015 but not in 2016. 
B)  The value of the cars will not affect the 2015 GDP, but will be included in 2016 GDP. 
C)  The value of the cars will be included in both 2015 and 2016 GDP. 
D)  The value of the cars will not be included in GDP in 2015 or 2016.

Question 14

A German citizen buys an automobile produced in Canada by a Japanese company. What happens as a result?

Accepted Answer

A)  Canadian net exports increase, Canadian GNP and GDP are unaffected, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected. 
B)  Canadian net exports, GNP, and GDP increase; Japanese GDP increases; German net exports decrease; and German GDP is unaffected. 
C)  Canadian net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GDP and GNP are unaffected. 
D)  Canadian net exports, GNP, and GDP are unaffected; Japanese GNP increases; German net exports decrease; and German GDP and GNP decrease. 
A)  Canadian net exports increase, Canadian GNP and GDP are unaffected, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected. 
B)  Canadian net exports, GNP, and GDP increase; Japanese GDP increases; German net exports decrease; and German GDP is unaffected. 
C)  Canadian net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GDP and GNP are unaffected. 
D)  Canadian net exports, GNP, and GDP are unaffected; Japanese GNP increases; German net exports decrease; and German GDP and GNP decrease.

Question 15

A Manitoba farmer buys a new tractor made in Alberta by a German company. What is the impact on investment and GDP?

Accepted Answer

A)  Canadian investment and German GDP increase, but Canadian GDP is unaffected. 
B)  Canadian investment and GDP increase, but German GDP is unaffected. 
C)  Canadian investment, Canadian GDP, and German GDP are unaffected, because tractors are intermediate goods. 
D)  Canadian investment, Canadian GDP, and German GDP all increase. 
A)  Canadian investment and German GDP increase, but Canadian GDP is unaffected. 
B)  Canadian investment and GDP increase, but German GDP is unaffected. 
C)  Canadian investment, Canadian GDP, and German GDP are unaffected, because tractors are intermediate goods. 
D)  Canadian investment, Canadian GDP, and German GDP all increase.

Question 16

Which of the following is included in the consumption component of GDP?

Accepted Answer

A)  CPP/QPP payments 
B)  purchases of foreign goods and services 
C)  purchases of newly constructed homes 
D)  goods produced but not sold during the reference period 
A)  CPP/QPP payments 
B)  purchases of foreign goods and services 
C)  purchases of newly constructed homes 
D)  goods produced but not sold during the reference period

Question 17

-Refer to the Table 5-4. Using 2014 as the base year, what can we conclude for 2013?

Accepted Answer

A)  Real GDP is $760, and the GDP deflator is 100. 
B)  Real GDP is $760, and the GDP deflator is 125. 
C)  Real GDP is $880, and the GDP deflator is 80. 
D)  Real GDP is $950, and the GDP deflator is 80. 
A)  Real GDP is $760, and the GDP deflator is 100. 
B)  Real GDP is $760, and the GDP deflator is 125. 
C)  Real GDP is $880, and the GDP deflator is 80. 
D)  Real GDP is $950, and the GDP deflator is 80.

Question 18

Why does expenditure equal income?

Accepted Answer

A)  because firms are required by law to pay out all their revenue as income to someone 
B)  because ultimately firms are owned by households 
C)  because for every sale there is a buyer and a seller 
D)  because the demand and supply of goods and services must be equal 
A)  because firms are required by law to pay out all their revenue as income to someone 
B)  because ultimately firms are owned by households 
C)  because for every sale there is a buyer and a seller 
D)  because the demand and supply of goods and services must be equal

Question 19

How is Canadian GNP calculated from Canadian GDP?

Accepted Answer

A)  by including income earned by foreigners in Canada and excluding income earned by Canadian citizens abroad 
B)  by including income earned by Canadian citizens abroad and excluding income earned by foreigners in Canada 
C)  by including income earned by foreigners in Canada 
D)  by excluding income earned by Canadian citizens abroad 
A)  by including income earned by foreigners in Canada and excluding income earned by Canadian citizens abroad 
B)  by including income earned by Canadian citizens abroad and excluding income earned by foreigners in Canada 
C)  by including income earned by foreigners in Canada 
D)  by excluding income earned by Canadian citizens abroad

Question 20

What was the approximate Canadian GDP in 2014?

Accepted Answer

A)  $1400 billion 
B)  $1600 billion 
C)  $1800 billion 
D)  $2000 billion 
A)  $1400 billion 
B)  $1600 billion 
C)  $1800 billion 
D)  $2000 billion

What is the relationship between income and expenditure for an economy?

In 2014, what were Canadian net exports?

Which statement supports the idea of using GDP as a measure of well-being?

If real GDP doubles and the GDP deflator doubles, what will happen to nominal GDP?

According to international studies, larger GDP per person is associated with which other measures of well-being?

Which of the following is counted in GDP?

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). What is included in GDP?

Why is GDP computed using market prices as the value of final goods and services?

What is included in GDP?

With respect to GDP, how are welfare payments treated?

-Refer to the Table 5-1. What is the national income for this economy?

-Refer to the Table 5-1. What is the disposable personal income for this economy?

The local Nissan dealership has an increase in inventory of 25 cars in 2015. How will the sale of all 25 cars in 2016 affect the GDP?

A German citizen buys an automobile produced in Canada by a Japanese company. What happens as a result?

A Manitoba farmer buys a new tractor made in Alberta by a German company. What is the impact on investment and GDP?

Which of the following is included in the consumption component of GDP?

-Refer to the Table 5-4. Using 2014 as the base year, what can we conclude for 2013?

Why does expenditure equal income?

How is Canadian GNP calculated from Canadian GDP?

What was the approximate Canadian GDP in 2014?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 5: Measuring a Nations Income

What is the relationship between income and expenditure for an economy?

In 2014, what were Canadian net exports?

Which statement supports the idea of using GDP as a measure of well-being?

If real GDP doubles and the GDP deflator doubles, what will happen to nominal GDP?

According to international studies, larger GDP per person is associated with which other measures of well-being?

Which of the following is counted in GDP?

Suppose an apartment complex converts to a condominium (i.e., the renters become owners of their apartments). What is included in GDP?

Why is GDP computed using market prices as the value of final goods and services?

What is included in GDP?

With respect to GDP, how are welfare payments treated?

-Refer to the Table 5-1. What is the national income for this economy?

-Refer to the Table 5-1. What is the disposable personal income for this economy?

The local Nissan dealership has an increase in inventory of 25 cars in 2015. How will the sale of all 25 cars in 2016 affect the GDP?

A German citizen buys an automobile produced in Canada by a Japanese company. What happens as a result?

A Manitoba farmer buys a new tractor made in Alberta by a German company. What is the impact on investment and GDP?

Which of the following is included in the consumption component of GDP?

-Refer to the Table 5-4. Using 2014 as the base year, what can we conclude for 2013?

Why does expenditure equal income?

How is Canadian GNP calculated from Canadian GDP?

What was the approximate Canadian GDP in 2014?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Small Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

Filters