Question 1

If the GDP deflator is less than 100, which will be higher: nominal GDP or real GDP? Why?

Accepted Answer

Real GDP will be higher.The GD

Question 2

Gross domestic product is calculated by summing up

Accepted Answer

A) the total quantity of goods and services in the economy. 
B) the total quantity of goods and services produced in the economy during a period of time. 
C) the total market value of goods and services in the economy. 
D) the total market value of final goods and services produced in the economy during a period of time. 
E) the total value of all goods and services produced by a countries people during a period of time. 
A) the total quantity of goods and services in the economy. 
B) the total quantity of goods and services produced in the economy during a period of time. 
C) the total market value of goods and services in the economy. 
D) the total market value of final goods and services produced in the economy during a period of time. 
E) the total value of all goods and services produced by a countries people during a period of time.

Question 3

The GDP deflator is equal to

Accepted Answer

A) real GDP divided by nominal GDP. 
B) nominal GDP divided by real GDP, multiplied by 100. 
C) nominal GDP divided by real GDP. 
D) real GDP divided by nominal GDP, multiplied by 100. 
E) nominal GDP to potential GDP, multiplied by 100. 
A) real GDP divided by nominal GDP. 
B) nominal GDP divided by real GDP, multiplied by 100. 
C) nominal GDP divided by real GDP. 
D) real GDP divided by nominal GDP, multiplied by 100. 
E) nominal GDP to potential GDP, multiplied by 100.

Question 4

Emily is a writer.She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each, what is the contribution to GDP of Emily's novel?

Accepted Answer

A) $25 million 
B) $20 million 
C) $500,000 
D) $50,000 
E) $20,000 
A) $25 million 
B) $20 million 
C) $500,000 
D) $50,000 
E) $20,000

Question 5

The underground economy can be described as

Accepted Answer

A) production of intermediate goods and services. 
B) economic production that includes mining. 
C) economic activity that is hidden from the government to avoid taxes or because the activity is illegal. 
D) production of infrastructure that spurs growth in the rest of the economy. 
E) production in the mining sector that takes place underground rather than in open pit mines. 
A) production of intermediate goods and services. 
B) economic production that includes mining. 
C) economic activity that is hidden from the government to avoid taxes or because the activity is illegal. 
D) production of infrastructure that spurs growth in the rest of the economy. 
E) production in the mining sector that takes place underground rather than in open pit mines.

Question 6

The GDP deflator does not capture the prices of

Accepted Answer

A) imports. 
B) exports. 
C) services. 
D) final goods. 
E) goods purchased by government. 
A) imports. 
B) exports. 
C) services. 
D) final goods. 
E) goods purchased by government.

Question 7

The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product.

Accepted Answer

A) equals 
B) is greater than 
C) is less than 
D) is sometimes greater than and other times less than 
E) is unrelated to 
A) equals 
B) is greater than 
C) is less than 
D) is sometimes greater than and other times less than 
E) is unrelated to

Question 8

Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists study?

Accepted Answer

A) Apple Prices Rise due to an Early Frost in Ontario 
B) The Canadian Auto Workers Sign a Contract Raising Wages and Benefits 7% Over the Next 3 Years 
C) Real GDP Grows by 2.3% in the Second Quarter 
D) Airlines Raise Ticket Prices in Response to Rising Fuel Costs 
E) Toyota Closes its Cambridge Production Facility 
A) Apple Prices Rise due to an Early Frost in Ontario 
B) The Canadian Auto Workers Sign a Contract Raising Wages and Benefits 7% Over the Next 3 Years 
C) Real GDP Grows by 2.3% in the Second Quarter 
D) Airlines Raise Ticket Prices in Response to Rising Fuel Costs 
E) Toyota Closes its Cambridge Production Facility

Question 9

In 2015, which component of GDP had a negative value?

Accepted Answer

A) consumption 
B) investment 
C) government spending 
D) net exports 
E) imports 
A) consumption 
B) investment 
C) government spending 
D) net exports 
E) imports

Question 10

Table 4.27   The components of national income for an economy are represented in Table 4.27 above.All values are in billions of dollars.
-Refer to Table 4.27.What is the level of disposable household income for this economy?

Accepted Answer

A) $1,080 billion 
B) $1,010 billion 
C) $980 billion 
D) $860 billion 
E) $590 billion 
A) $1,080 billion 
B) $1,010 billion 
C) $980 billion 
D) $860 billion 
E) $590 billion

Question 11

Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next?

Accepted Answer

Nominal GDP can change because

Question 12

In the circular flow diagram, ________ supply the factors of production and ________ goods and services.

Accepted Answer

A) households; sell 
B) households; buy 
C) firms; sell 
D) firms; buy 
A) households; sell 
B) households; buy 
C) firms; sell 
D) firms; buy

Question 13

Suppose that in 2018, the net national income in Madeupistan was $20 billion, depreciation was $1.5 billion, personal taxes were $2 billion, and transfer payments were $1 billion.Gross domestic product in 2018 is

Accepted Answer

A) $18.5 billion. 
B) $21.5 billion. 
C) $22 billion. 
D) $24.5 billion. 
E) $30 billion. 
A) $18.5 billion. 
B) $21.5 billion. 
C) $22 billion. 
D) $24.5 billion. 
E) $30 billion.

Question 14

The underground economy-the informal sector-can be a significant drag on the economies of developing countries.Why are firms in the informal sector often less efficient than firms in the formal sector?

Accepted Answer

Entrepreneurs of the firms in the inform

Question 15

Which of the following is not a category used in the Income Approach to calculating GDP?

Accepted Answer

A) Net exports 
B) Compensation of employees 
C) Taxes minus subsidies 
D) Gross operating surplus 
E) Gross mixed income 
A) Net exports 
B) Compensation of employees 
C) Taxes minus subsidies 
D) Gross operating surplus 
E) Gross mixed income

Question 16

Table 4.30  
-Refer to Table 4.30.Based on the table above, what is the net national income for this economy?

Accepted Answer

A) $4,700 billion 
B) $4,000 billion 
C) $3,150 billion 
D) $2,450 billion 
E) $1,850 billion 
A) $4,700 billion 
B) $4,000 billion 
C) $3,150 billion 
D) $2,450 billion 
E) $1,850 billion

Question 17

Table 4.12  
-Refer to Table 4.12.Consider the data shown above on nominal GDP and real GDP (values are in billions of dollars).The base year used in calculating real GDP is

Accepted Answer

A) 2012. 
B) 2013. 
C) 2014. 
D) 2015. 
A) 2012. 
B) 2013. 
C) 2014. 
D) 2015.

Question 18

Net national income is derived from gross domestic product by

Accepted Answer

A) subtracting retained earnings from gross domestic product. 
B) adding personal taxes and depreciation to gross domestic product. 
C) subtracting depreciation from gross domestic product. 
D) adding personal income and transfer payments to gross domestic product. 
E) adding taxes and depreciation to gross domestic product. 
A) subtracting retained earnings from gross domestic product. 
B) adding personal taxes and depreciation to gross domestic product. 
C) subtracting depreciation from gross domestic product. 
D) adding personal income and transfer payments to gross domestic product. 
E) adding taxes and depreciation to gross domestic product.

Question 19

Depreciation is

Accepted Answer

A) the value of worn-out equipment, machinery, and buildings. 
B) the value of the decrease in business inventory stocks. 
C) the value of the addition to the capital stock. 
D) the decline in the value of the stock market, net of dividends. 
E) the decline in the value of the Canadian dollar do to inflation. 
A) the value of worn-out equipment, machinery, and buildings. 
B) the value of the decrease in business inventory stocks. 
C) the value of the addition to the capital stock. 
D) the decline in the value of the stock market, net of dividends. 
E) the decline in the value of the Canadian dollar do to inflation.

Question 20

Value added equals the market price of the firm's product minus

Accepted Answer

A) wages and salaries. 
B) the price of intermediate goods. 
C) the price of all factors of production. 
D) depreciation on plant and equipment. 
E) taxes paid to government. 
A) wages and salaries. 
B) the price of intermediate goods. 
C) the price of all factors of production. 
D) depreciation on plant and equipment. 
E) taxes paid to government.

If the GDP deflator is less than 100, which will be higher: nominal GDP or real GDP? Why?

Gross domestic product is calculated by summing up

The GDP deflator is equal to

Emily is a writer.She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each, what is the contribution to GDP of Emily's novel?

The underground economy can be described as

The GDP deflator does not capture the prices of

The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product.

Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists study?

In 2015, which component of GDP had a negative value?

Table 4.27 The components of national income for an economy are represented in Table 4.27 above.All values are in billions of dollars. -Refer to Table 4.27.What is the level of disposable household income for this economy?

Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next?

In the circular flow diagram, supply the factors of production and goods and services.

Suppose that in 2018, the net national income in Madeupistan was $20 billion, depreciation was $1.5 billion, personal taxes were $2 billion, and transfer payments were $1 billion.Gross domestic product in 2018 is

The underground economy-the informal sector-can be a significant drag on the economies of developing countries.Why are firms in the informal sector often less efficient than firms in the formal sector?

Which of the following is not a category used in the Income Approach to calculating GDP?

Table 4.30 -Refer to Table 4.30.Based on the table above, what is the net national income for this economy?

Table 4.12 -Refer to Table 4.12.Consider the data shown above on nominal GDP and real GDP (values are in billions of dollars).The base year used in calculating real GDP is

Net national income is derived from gross domestic product by

Depreciation is

Value added equals the market price of the firm's product minus

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

Exam 4: GDP: Measuring Total Production and Income

If the GDP deflator is less than 100, which will be higher: nominal GDP or real GDP? Why?

Gross domestic product is calculated by summing up

The GDP deflator is equal to

Emily is a writer.She buys pens and paper for $20 and writes a 500-page novel that she sells to a publishing company for $500,000.If the publisher prints 1 million copies that sell for $25 each, what is the contribution to GDP of Emily's novel?

The underground economy can be described as

The GDP deflator does not capture the prices of

The sum of the value added of every firm involved in producing all final goods and services ________ gross domestic product.

Which of the following headlines would be more closely related to what macroeconomists study than what microeconomists study?

In 2015, which component of GDP had a negative value?

Table 4.27 The components of national income for an economy are represented in Table 4.27 above.All values are in billions of dollars. -Refer to Table 4.27.What is the level of disposable household income for this economy?

Why does inflation make nominal GDP a poor measure of the increase in total production from one year to the next?

In the circular flow diagram, ________ supply the factors of production and ________ goods and services.

Suppose that in 2018, the net national income in Madeupistan was $20 billion, depreciation was $1.5 billion, personal taxes were $2 billion, and transfer payments were $1 billion.Gross domestic product in 2018 is

The underground economy-the informal sector-can be a significant drag on the economies of developing countries.Why are firms in the informal sector often less efficient than firms in the formal sector?

Which of the following is not a category used in the Income Approach to calculating GDP?

Table 4.30 -Refer to Table 4.30.Based on the table above, what is the net national income for this economy?

Table 4.12 -Refer to Table 4.12.Consider the data shown above on nominal GDP and real GDP (values are in billions of dollars).The base year used in calculating real GDP is

Net national income is derived from gross domestic product by

Depreciation is

Value added equals the market price of the firm's product minus

Economics: Foundations and Models

Trade-Offs, Comparative Advantage, and the Market System

Where Prices Come From: The Interaction of Supply and Demand

Unemployment and Inflation

Economic Growth, The Financial System, and Business Cycles

Long-Run Economic Growth: Sources and Policies

Aggregate Expenditure and Output in the Short Run

Aggregate Demand and Aggregate Supply Analysis

Money, Banks, and the Bank of Canada

Monetary Policy

Fiscal Policy

Inflation, Unemployment, and Bank of Canada Policy

Macroeconomics in an Open Economy

The International Financial System

Filters

In the circular flow diagram, supply the factors of production and goods and services.