Question 1

Final consumption expenditures do not include household purchases of

Accepted Answer

A) dental care. 
B) social workers salaries. 
C) road construction. 
D) clothing purchases by households. 
E) medication. 
A) dental care. 
B) social workers salaries. 
C) road construction. 
D) clothing purchases by households. 
E) medication.

Question 2

Which of the following transactions represents the purchase of a final good?

Accepted Answer

A) Tim Hortons purchases coffee beans. 
B) WestJet buys a new European-made jetliner. 
C) Blackberry buys computer processors from Intel. 
D) Your father buys a new John Deere riding lawn mower. 
E) Pearson buys several tonnes of paper to print text books. 
A) Tim Hortons purchases coffee beans. 
B) WestJet buys a new European-made jetliner. 
C) Blackberry buys computer processors from Intel. 
D) Your father buys a new John Deere riding lawn mower. 
E) Pearson buys several tonnes of paper to print text books.

Question 3

Table 4.20   A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above.
-Refer to Table 4.20.What is the GDP deflator in 2007 if 2017 is the base year?

Accepted Answer

A) 187 
B) 100 
C) 87 
D) 8.7 
E) 0.87 
A) 187 
B) 100 
C) 87 
D) 8.7 
E) 0.87

Question 4

Table 4.23  
-Refer to Table 4.23.Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks.Suppose the quantities produced and their corresponding prices for 2013 and 2015 are shown in the table above.Use the information to compute real GDP in the year 2013 and 2015.Assume that 2013 is the base year.Is output higher in 2015 or 2013? Why?

Accepted Answer

Recall that real GDP is found by valuing

Question 5

How can a firm have a negative valued added, as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?

Accepted Answer

A negative value added means that the co

Question 6

Table 4.9  
-Refer to Table 4.9.Suppose that the above table represents the goods and services produced in a very simple economy in 2015.Assume that steel is used as an input in the production of autos.Using this information, calculate GDP for the year 2015.

Accepted Answer

First, we must decide which goods to inc

Question 7

Which of the following equations correctly measures GDP in an economy?

Accepted Answer

A) GDP = C + I + G + X 
B) GDP = C + net I + G + NX 
C) GDP = C + I + G + NX 
D) GDP = C + G + I - taxes 
E) GDP = C + I + G + NX + wages 
A) GDP = C + I + G + X 
B) GDP = C + net I + G + NX 
C) GDP = C + I + G + NX 
D) GDP = C + G + I - taxes 
E) GDP = C + I + G + NX + wages

Question 8

GDP is

Accepted Answer

A) entirely unrelated to personal well-being. 
B) imperfectly related to personal well-being. 
C) the only method of measuring the success of a country. 
D) entirely pointless. 
E) the only valid approach to measuring improvements in well-being. 
A) entirely unrelated to personal well-being. 
B) imperfectly related to personal well-being. 
C) the only method of measuring the success of a country. 
D) entirely pointless. 
E) the only valid approach to measuring improvements in well-being.

Question 9

The purchase by a household in China of a CD produced in Canada is included in Canadian

Accepted Answer

A) consumption expenditures. 
B) investment expenditures. 
C) government purchases. 
D) net exports. 
E) it is not included in Canadian accounts. 
A) consumption expenditures. 
B) investment expenditures. 
C) government purchases. 
D) net exports. 
E) it is not included in Canadian accounts.

Question 10

Nominal GDP will increase

Accepted Answer

A) only if the price level rises. 
B) only if the price level falls. 
C) only if the quantity of final goods and services produced rises. 
D) if either the price level or the quantity of goods and services produced rises. 
E) only if real GDP rises. 
A) only if the price level rises. 
B) only if the price level falls. 
C) only if the quantity of final goods and services produced rises. 
D) if either the price level or the quantity of goods and services produced rises. 
E) only if real GDP rises.

Question 11

Even though it is generally true that the more goods and services people have, the better off they are, GDP provides only a rough measure of well-being.Assuming language is not an issue, what other factors besides GDP might you consider when deciding where to live and work?

Accepted Answer

Factors not included in GDP which you mi

Question 12

Table 4.1.1  
-Refer to Table 4.1.1. Based on the information provided, what is GDP in this economy using the income approach?

Accepted Answer

A) $1,700 million 
B) $1,750 million 
C) $3,006 million 
D) $3,656 million 
E) $4,256 million 
A) $1,700 million 
B) $1,750 million 
C) $3,006 million 
D) $3,656 million 
E) $4,256 million

Question 13

Table 4.1  
-Refer to Table 4.1.Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans.Assume all of the coffee beans are used in the production of the coffee drinks.Using the information in the above table, nominal GDP for this simple economy equals

Accepted Answer

A) $114.50. 
B) 3,090 units. 
C) $7,250. 
D) $8,750. 
E) $9,750. 
A) $114.50. 
B) 3,090 units. 
C) $7,250. 
D) $8,750. 
E) $9,750.

Question 14

High-income countries such as Canada spend a greater amount on services as compared to goods.

Accepted Answer

A) True 
 B)False

Question 15

Table 4.11   Consider the above data for Tyrovia, a country that produces only two products: guns and butter.
-Refer to Table 4.11.Real GDP for Tyrovia for 2018 using 2012 as the base year equals

Accepted Answer

A) $1,140. 
B) $880. 
C) $690. 
D) $560. 
E) $320. 
A) $1,140. 
B) $880. 
C) $690. 
D) $560. 
E) $320.

Question 16

To make the calculation of real GDP more accurate, Statistics Canada began publishing real GDP data in

Accepted Answer

A) base-year prices. 
B) current prices. 
C) chain-weighted prices. 
D) market prices. 
E) American dollar prices. 
A) base-year prices. 
B) current prices. 
C) chain-weighted prices. 
D) market prices. 
E) American dollar prices.

Question 17

Table 4.3  
-Refer to Table 4.3.Consider the data above (in billions of dollars)for an economy: Gross domestic product (in billions of dollars)for this economy equals

Accepted Answer

A) $2,200. 
B) $1,600. 
C) $1,400. 
D) $1,200. 
E) $800. 
A) $2,200. 
B) $1,600. 
C) $1,400. 
D) $1,200. 
E) $800.

Question 18

The table below describes the value added in the production of a gallon of gasoline by each stage of production.(The values are hypothetical.)
Table 4.10   a)What is the value added by each stage of production?
b)What is the total value added?
For simplicity, you can ignore the cost of the inputs for oil drilling.

Accepted Answer

@#IMG-DLM& a)The value added is the difference bet

Question 19

Which of the following could cause nominal GDP to increase, but real GDP to decrease?

Accepted Answer

A) The price level rises, and the quantity of final goods and services produced rises. 
B) The price level rises, and the quantity of final goods and services produced falls. 
C) The price level falls, and the quantity of final goods and services produced rises. 
D) The price level falls, and the quantity of final goods and services produced falls. 
A) The price level rises, and the quantity of final goods and services produced rises. 
B) The price level rises, and the quantity of final goods and services produced falls. 
C) The price level falls, and the quantity of final goods and services produced rises. 
D) The price level falls, and the quantity of final goods and services produced falls.

Question 20

In a small economy for 2017, final consumption spending $6,000, inventory investment is $1,200, gross fixed capital formation is $1,500, exports are $2,000, and imports are $1,000.What is gross domestic product in 2017?

Accepted Answer

A) $9,700 
B) $9,800 
C) $10,800 
D) $11,700 
E) $15,700 
A) $9,700 
B) $9,800 
C) $10,800 
D) $11,700 
E) $15,700

Final consumption expenditures do not include household purchases of

Which of the following transactions represents the purchase of a final good?

Table 4.20 A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above. -Refer to Table 4.20.What is the GDP deflator in 2007 if 2017 is the base year?

How can a firm have a negative valued added, as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?

Table 4.9 -Refer to Table 4.9.Suppose that the above table represents the goods and services produced in a very simple economy in 2015.Assume that steel is used as an input in the production of autos.Using this information, calculate GDP for the year 2015.

Which of the following equations correctly measures GDP in an economy?

GDP is

The purchase by a household in China of a CD produced in Canada is included in Canadian

Nominal GDP will increase

Even though it is generally true that the more goods and services people have, the better off they are, GDP provides only a rough measure of well-being.Assuming language is not an issue, what other factors besides GDP might you consider when deciding where to live and work?

Table 4.1.1 -Refer to Table 4.1.1. Based on the information provided, what is GDP in this economy using the income approach?

High-income countries such as Canada spend a greater amount on services as compared to goods.

Table 4.11 Consider the above data for Tyrovia, a country that produces only two products: guns and butter. -Refer to Table 4.11.Real GDP for Tyrovia for 2018 using 2012 as the base year equals

To make the calculation of real GDP more accurate, Statistics Canada began publishing real GDP data in

Table 4.3 -Refer to Table 4.3.Consider the data above (in billions of dollars)for an economy: Gross domestic product (in billions of dollars)for this economy equals

Which of the following could cause nominal GDP to increase, but real GDP to decrease?

In a small economy for 2017, final consumption spending $6,000, inventory investment is $1,200, gross fixed capital formation is $1,500, exports are $2,000, and imports are $1,000.What is gross domestic product in 2017?

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

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Exam 4: GDP: Measuring Total Production and Income

Final consumption expenditures do not include household purchases of

Which of the following transactions represents the purchase of a final good?

Table 4.20 A very simple economy produces three goods: cameras, legal services, and books.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above. -Refer to Table 4.20.What is the GDP deflator in 2007 if 2017 is the base year?

How can a firm have a negative valued added, as supposedly some state-owned businesses did in the former Soviet Union? What has to be true for value added to be negative?

Table 4.9 -Refer to Table 4.9.Suppose that the above table represents the goods and services produced in a very simple economy in 2015.Assume that steel is used as an input in the production of autos.Using this information, calculate GDP for the year 2015.

Which of the following equations correctly measures GDP in an economy?

GDP is

The purchase by a household in China of a CD produced in Canada is included in Canadian

Nominal GDP will increase

Even though it is generally true that the more goods and services people have, the better off they are, GDP provides only a rough measure of well-being.Assuming language is not an issue, what other factors besides GDP might you consider when deciding where to live and work?

Table 4.1.1 -Refer to Table 4.1.1. Based on the information provided, what is GDP in this economy using the income approach?

High-income countries such as Canada spend a greater amount on services as compared to goods.

Table 4.11 Consider the above data for Tyrovia, a country that produces only two products: guns and butter. -Refer to Table 4.11.Real GDP for Tyrovia for 2018 using 2012 as the base year equals

To make the calculation of real GDP more accurate, Statistics Canada began publishing real GDP data in

Table 4.3 -Refer to Table 4.3.Consider the data above (in billions of dollars)for an economy: Gross domestic product (in billions of dollars)for this economy equals

Which of the following could cause nominal GDP to increase, but real GDP to decrease?

In a small economy for 2017, final consumption spending $6,000, inventory investment is $1,200, gross fixed capital formation is $1,500, exports are $2,000, and imports are $1,000.What is gross domestic product in 2017?

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

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