Question 1

Saving is a ________ variable, and wealth is a ________ variable.

Accepted Answer

A)  stock; flow 
B)  stock; stock 
C)  flow; flow 
D)  flow; stock 
A)  stock; flow 
B)  stock; stock 
C)  flow; flow 
D)  flow; stock D

Question 2

Use the following information to answer this question about the country of Polity: $$\begin{array} { l c c c c } 
& 2000 & &{ 2001 } \
\hline \text { Good } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Guns } & 4000 & \$ 4 & 4500 & \$ 6 \
\text { Butter } & 5000 & \$ 3 & 5200 & \$ 2 \
\hline
\end{array}$$ Using a fixed-weight price index with 1998 as the base year, what is the percent change in real output from 2000 to 2001?

Accepted Answer

A)  8% 
B)  10% 
C)  12% 
D)  15% 
A)  8% 
B)  10% 
C)  12% 
D)  15% B

Question 3

Private saving is defined as being equal to

Accepted Answer

A)  private disposable income minus consumption. 
B)  net national product minus consumption. 
C)  private disposable income minus consumption plus interest. 
D)  private disposable income minus consumption plus interest plus transfer payments. 
A)  private disposable income minus consumption. 
B)  net national product minus consumption. 
C)  private disposable income minus consumption plus interest. 
D)  private disposable income minus consumption plus interest plus transfer payments. A

Question 4

A fixed-weight price index

Accepted Answer

A)  equals the value of current output at current prices divided by the value of current output at base-year prices. 
B)  equals the value of a fixed basket at current prices divided by the value of a fixed basket at base-year prices. 
C)  is used to calculate the GDP deflator. 
D)  is misleading because it cannot distinguish between nominal and real measures. 
A)  equals the value of current output at current prices divided by the value of current output at base-year prices. 
B)  equals the value of a fixed basket at current prices divided by the value of a fixed basket at base-year prices. 
C)  is used to calculate the GDP deflator. 
D)  is misleading because it cannot distinguish between nominal and real measures.

Question 5

The nominal interest rate is 750, today's price level is 150, and you expect the price level to be 156 one year from now. What is the expected inflation rate? What is the expected real interest rate?

Accepted Answer

Expected inflation =

Question 6

The uses-of-saving identity says that an economy's private saving is used for

Accepted Answer

A)  investment, interest expenses, and the government budget deficit. 
B)  investment, the government budget deficit, and the current account. 
C)  investment, interest expenses, the government budget deficit, and the current account. 
D)  investment, interest expenses, the government budget deficit, transfer payments, and the current account. 
A)  investment, interest expenses, and the government budget deficit. 
B)  investment, the government budget deficit, and the current account. 
C)  investment, interest expenses, the government budget deficit, and the current account. 
D)  investment, interest expenses, the government budget deficit, transfer payments, and the current account.

Question 7

GDP differs from GNP because

Accepted Answer

A)  GDP = GNP - net factor payments from abroad. 
B)  GNP = GDP - net factor payments from abroad. 
C)  GDP = GNP - capital consumption allowances. 
D)  GNP = GDP - capital consumption allowances. 
A)  GDP = GNP - net factor payments from abroad. 
B)  GNP = GDP - net factor payments from abroad. 
C)  GDP = GNP - capital consumption allowances. 
D)  GNP = GDP - capital consumption allowances.

Question 8

Assume that the municipal government of Lethbridge, Alberta, has taxes of $500, government purchases of $350, transfer payments of $150, and interest expenses of $50. The government budget would

Accepted Answer

A)  show a surplus of $100. 
B)  show a surplus of $50. 
C)  be in balance with neither a surplus nor a deficit. 
D)  show a deficit of $50. 
A)  show a surplus of $100. 
B)  show a surplus of $50. 
C)  be in balance with neither a surplus nor a deficit. 
D)  show a deficit of $50.

Question 9

If the price index last year was 1.0 and today it is 1.4, what is the inflation rate over this period?

Accepted Answer

A)  -4% 
B)  1.4% 
C)  4% 
D)  40% 
A)  -4% 
B)  1.4% 
C)  4% 
D)  40%

Question 10

Intermediate goods are

Accepted Answer

A)  capital goods, which are used up in the production of other goods but were produced in earlier periods. 
B)  final goods that remain in inventories. 
C)  goods that are used up in the production of other goods in the same period that they were produced. 
D)  either capital goods or inventories. 
A)  capital goods, which are used up in the production of other goods but were produced in earlier periods. 
B)  final goods that remain in inventories. 
C)  goods that are used up in the production of other goods in the same period that they were produced. 
D)  either capital goods or inventories.

Question 11

Which of the following statements is true?

Accepted Answer

A)  Capital goods are a type of intermediate good. 
B)  Capital goods are final goods because they are not used up during a given year. 
C)  Capital goods are produced in the same year as the related final goods, whereas intermediate goods are produced in different years. 
D)  Capital goods are produced in one year and final goods are produced over a period of more than one year. 
A)  Capital goods are a type of intermediate good. 
B)  Capital goods are final goods because they are not used up during a given year. 
C)  Capital goods are produced in the same year as the related final goods, whereas intermediate goods are produced in different years. 
D)  Capital goods are produced in one year and final goods are produced over a period of more than one year.

Question 12

If a Canadian construction company built a road in Kuwait, this activity would be

Accepted Answer

A)  excluded from Canadian GNP. 
B)  fully included in Canadian GDP. 
C)  included in Canadian GNP only for that portion that was attributable to Canadian capital and labour. 
D)  included in Canadian GDP but not Canadian GNP. 
A)  excluded from Canadian GNP. 
B)  fully included in Canadian GDP. 
C)  included in Canadian GNP only for that portion that was attributable to Canadian capital and labour. 
D)  included in Canadian GDP but not Canadian GNP.

Question 13

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: $$\begin{array} { l c c c c } 
& 2001 & &{ 2002 } \
\hline \text { Good } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Milk } & 500 & \$ 2 & 900 & \$ 3 \
\text { Butter } & 2000 & \$ 1 & 3000 & \$ 2 \
\hline
\end{array}$$ Between 2001 and 2002, the percent change in the price level as measured by a fixed-weight index that uses production in 2001 as the fixed "basket" of goods 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 14

What is the main conceptual difference between GDP and GNP? How different are GDP and GNP for Canada? For countries with many citizens who work abroad?

Accepted Answer

GDP represents output produced within a

Question 15

If real GDP falls by 1 percent, but the nominal GDP rises by 5 percent, then we must conclude that

Accepted Answer

A)  the price level rises by 5 percent. 
B)  the price level falls by 1 percent. 
C)  the price level rises by 6 percent. 
D)  the price level falls by 4 percent. 
A)  the price level rises by 5 percent. 
B)  the price level falls by 1 percent. 
C)  the price level rises by 6 percent. 
D)  the price level falls by 4 percent.

Question 16

Beautiful Boating purchases five new boats at $200 thousand each to rent to vacationing fishermen. The firm sells its old boats to the public for $500 thousand. The net increase in GDP of these transactions was

Accepted Answer

A)  $500,000. 
B)  $1,000,000. 
C)  $1,250,000. 
D)  $1,500,000. 
A)  $500,000. 
B)  $1,000,000. 
C)  $1,250,000. 
D)  $1,500,000.

Question 17

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.

Question 18

Canada's current account has recently been negative. This means that

Accepted Answer

A)  investment is greater than saving in Canada 
B)  saving is greater than investment in Canada. 
C)  Canadian trade partners also have current account deficit. 
D)  interest rate is higher in Canada compared to the US. 
A)  investment is greater than saving in Canada 
B)  saving is greater than investment in Canada. 
C)  Canadian trade partners also have current account deficit. 
D)  interest rate is higher in Canada compared to the US.

Question 19

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: $$\begin{array} { l c c c c } 
& 2000 & &{ 2001 } \
\hline \text { Good } & \text { Quantity } & \text { Price } & \text { Quantity } & \text { Price } \
\hline \text { Milk } & 500 & \$ 2 & 900 & \$ 3 \
\text { Butter } & 2000 & \$ 1 & 3000 & \$ 2 \
\hline
\end{array}$$ Between 2000 and 2001 nominal GDP grew by

Accepted Answer

A)  60.0%. 
B)  65.5%. 
C)  83.3%. 
D)  190.0%. 
A)  60.0%. 
B)  65.5%. 
C)  83.3%. 
D)  190.0%.

Question 20

National saving equals private saving plus government saving, which in turns equals

Accepted Answer

A)  C + S + T. 
B)  GDP + C + G. 
C)  GDP + NFP. 
D)  GDP + NFP - C - G. 
A)  C + S + T. 
B)  GDP + C + G. 
C)  GDP + NFP. 
D)  GDP + NFP - C - G.

Saving is a variable, and wealth is a variable.

Use the following information to answer this question about the country of Polity: 2000 2001 Good Quantity Price Quantity Price Guns 4000 \ 4 4500 \ 6 Butter 5000 \ 3 5200 \ 2 Using a fixed-weight price index with 1998 as the base year, what is the percent change in real output from 2000 to 2001?

Private saving is defined as being equal to

A fixed-weight price index

The nominal interest rate is 750, today's price level is 150, and you expect the price level to be 156 one year from now. What is the expected inflation rate? What is the expected real interest rate?

The uses-of-saving identity says that an economy's private saving is used for

GDP differs from GNP because

Assume that the municipal government of Lethbridge, Alberta, has taxes of $500, government purchases of $350, transfer payments of $150, and interest expenses of $50. The government budget would

If the price index last year was 1.0 and today it is 1.4, what is the inflation rate over this period?

Intermediate goods are

Which of the following statements is true?

If a Canadian construction company built a road in Kuwait, this activity would be

What is the main conceptual difference between GDP and GNP? How different are GDP and GNP for Canada? For countries with many citizens who work abroad?

If real GDP falls by 1 percent, but the nominal GDP rises by 5 percent, then we must conclude that

Beautiful Boating purchases five new boats at $200 thousand each to rent to vacationing fishermen. The firm sells its old boats to the public for $500 thousand. The net increase in GDP of these transactions was

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,

Canada's current account has recently been negative. This means that

National saving equals private saving plus government saving, which in turns equals

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-LMAD-AS Model: A General Framework for Macroeconomic Analysis

Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy

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

Saving is a ________ variable, and wealth is a ________ variable.

Use the following information to answer this question about the country of Polity: 2000 2001 Good Quantity Price Quantity Price Guns 4000 \ 4 4500 \ 6 Butter 5000 \ 3 5200 \ 2 Using a fixed-weight price index with 1998 as the base year, what is the percent change in real output from 2000 to 2001?

Private saving is defined as being equal to

A fixed-weight price index

The nominal interest rate is 750, today's price level is 150, and you expect the price level to be 156 one year from now. What is the expected inflation rate? What is the expected real interest rate?

The uses-of-saving identity says that an economy's private saving is used for

GDP differs from GNP because

Assume that the municipal government of Lethbridge, Alberta, has taxes of $500, government purchases of $350, transfer payments of $150, and interest expenses of $50. The government budget would

If the price index last year was 1.0 and today it is 1.4, what is the inflation rate over this period?

Intermediate goods are

Which of the following statements is true?

If a Canadian construction company built a road in Kuwait, this activity would be

What is the main conceptual difference between GDP and GNP? How different are GDP and GNP for Canada? For countries with many citizens who work abroad?

If real GDP falls by 1 percent, but the nominal GDP rises by 5 percent, then we must conclude that

Beautiful Boating purchases five new boats at $200 thousand each to rent to vacationing fishermen. The firm sells its old boats to the public for $500 thousand. The net increase in GDP of these transactions was

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,

Canada's current account has recently been negative. This means that

National saving equals private saving plus government saving, which in turns equals

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-LMAD-AS Model: A General Framework for Macroeconomic Analysis

Exchange Rates, Business Cycles, and Macroeconomic Policy in the Open Economy

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

Saving is a variable, and wealth is a variable.