Question 1

Which of the following is counted in GDP?

Accepted Answer

A) the value of goods and services produced in the underground economy 
B) the cost of a speed boat purchased by drug smugglers 
C) the value of do-it-yourself work 
D) the value of leisure 
E) the value of learning that takes place when you read a book from the library 
A) the value of goods and services produced in the underground economy 
B) the cost of a speed boat purchased by drug smugglers 
C) the value of do-it-yourself work 
D) the value of leisure 
E) the value of learning that takes place when you read a book from the library

Question 2

Which of the following is a true statement about real and nominal GDP?

Accepted Answer

A) If nominal GDP increases from one year to the next, we know that production of goods and services has risen. 
B) Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and services year after year. 
C) Increases in average prices do not affect the calculation of nominal GDP. 
D) If real GDP increases from one year to the next, we know that production of goods and services has risen. 
E) If real GDP increases from one year to the next, nominal GDP will have risen as well. 
A) If nominal GDP increases from one year to the next, we know that production of goods and services has risen. 
B) Nominal GDP is a better measure than real GDP in comparing changes in the production of goods and services year after year. 
C) Increases in average prices do not affect the calculation of nominal GDP. 
D) If real GDP increases from one year to the next, we know that production of goods and services has risen. 
E) If real GDP increases from one year to the next, nominal GDP will have risen as well.

Question 3

If prices are rising on average, then

Accepted Answer

A) real GDP will always be equal to nominal GDP. 
B) real GDP will be greater than nominal GDP in the years after the base year. 
C) real GDP will be less than nominal GDP in the years before the base year. 
D) real GDP will be greater than nominal GDP in the years before the base year. 
E) real GDP will certainly be lower than nominal GDP. 
A) real GDP will always be equal to nominal GDP. 
B) real GDP will be greater than nominal GDP in the years after the base year. 
C) real GDP will be less than nominal GDP in the years before the base year. 
D) real GDP will be greater than nominal GDP in the years before the base year. 
E) real GDP will certainly be lower than nominal GDP.

Question 4

Gross domestic product understates the total production of final goods and services because of the omission of

Accepted Answer

A) exports. 
B) inflation. 
C) intermediate goods. 
D) household production. 
E) imports. 
A) exports. 
B) inflation. 
C) intermediate goods. 
D) household production. 
E) imports.

Question 5

Suppose, in 2018, you purchased a house built in 2010.Which of the following would be included in the gross domestic product for 2018?

Accepted Answer

A) the value of the house in 2018 
B) the value of the house in 2010 
C) the value of the house in 2018 minus depreciation 
D) the value of the services of the real estate agent 
E) the value of the down payment you made on the mortgage 
A) the value of the house in 2018 
B) the value of the house in 2010 
C) the value of the house in 2018 minus depreciation 
D) the value of the services of the real estate agent 
E) the value of the down payment you made on the mortgage

Question 6

The "underground economy" is also referred to as

Accepted Answer

A) the informal sector. 
B) the formal sector. 
C) the halfway economy. 
D) the net domestic product economy. 
E) the mining sector. 
A) the informal sector. 
B) the formal sector. 
C) the halfway economy. 
D) the net domestic product economy. 
E) the mining sector.

Question 7

In periods when prices are falling, on average,

Accepted Answer

A) real GDP will grow slower than nominal GDP. 
B) real GDP will grow faster than nominal GDP. 
C) real GDP will grow as fast as nominal GDP. 
D) real GDP will certainly be lower than nominal GDP. 
E) real GDP cannot be calculated. 
A) real GDP will grow slower than nominal GDP. 
B) real GDP will grow faster than nominal GDP. 
C) real GDP will grow as fast as nominal GDP. 
D) real GDP will certainly be lower than nominal GDP. 
E) real GDP cannot be calculated.

Question 8

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

Accepted Answer

A) $10,700 
B) $10,300 
C) $10,200 
D) $10,000 
E) $2,500 
A) $10,700 
B) $10,300 
C) $10,200 
D) $10,000 
E) $2,500

Question 9

It is possible for nominal GDP to fall while real GDP rises.

Accepted Answer

A) True 
 B)False

Question 10

In comparing China to the United Kingdom, China's relatively ________ growth rate in GDP would make you more likely to take a job in China, and China's relatively ________ level of GDP would make you less likely to take a job in China.

Accepted Answer

A) high; low 
B) high; high 
C) low; low 
D) low; high 
E) stable; volatile 
A) high; low 
B) high; high 
C) low; low 
D) low; high 
E) stable; volatile

Question 11

Investment, as defined by economists, would not include which of the following? Ford

Accepted Answer

A) buys a new robotic machine (from a plant in Ontario)to assemble cars. 
B) adds 1,000 new cars to inventories. 
C) builds another assembly plant in Oakville, Ontario. 
D) buys Canadian government bonds. 
E) buys new computers for its human resources department. 
A) buys a new robotic machine (from a plant in Ontario)to assemble cars. 
B) adds 1,000 new cars to inventories. 
C) builds another assembly plant in Oakville, Ontario. 
D) buys Canadian government bonds. 
E) buys new computers for its human resources department.

Question 12

The statistical discrepancy captures

Accepted Answer

A) small errors in the original data. 
B) the probability of the income approach being incorrect. 
C) mismeasurement due to poor definitions. 
D) uncertainty over household spending. 
E) the size of the underground economy. 
A) small errors in the original data. 
B) the probability of the income approach being incorrect. 
C) mismeasurement due to poor definitions. 
D) uncertainty over household spending. 
E) the size of the underground economy.

Question 13

The output of Mexican citizens who work in Ontario would be included in the

Accepted Answer

A) gross domestic product of Mexico. 
B) gross national income of Mexico. 
C) gross national product of Canada. 
D) net national income of Canada. 
E) disposable income of Canada. 
A) gross domestic product of Mexico. 
B) gross national income of Mexico. 
C) gross national product of Canada. 
D) net national income of Canada. 
E) disposable income of Canada.

Question 14

Table 4.24  
-Refer to Table 4.24.Suppose that a very simple economy produces three goods: pizzas, haircuts, and backpacks.Suppose the quantities produced and their corresponding prices for 2007 and 2015 are shown in the table above.Use the information to compute real GDP in the year 2007 and 2015. Calculate real GDP in 2015 assuming the base year is 2007. Do the same calculation assuming the base year is 2015.Are the calculations different? Why?

Accepted Answer

Recall that real GDP is found by valuing

Question 15

Scenario 4.1
CANOES-R-US makes canoes.It buys the shell of the canoe from another firm for $300 and uses its labour and intermediate goods to make the canoe.It sells the finished canoe to a retail canoe store for $800.The retail canoe store then sells the canoe to a consumer for $1,200.
-Refer to Scenario 4.1.The value of each canoe in gross domestic product equals

Accepted Answer

A) $1,200. 
B) $800. 
C) $500. 
D) $400. 
E) $300. 
A) $1,200. 
B) $800. 
C) $500. 
D) $400. 
E) $300.

Question 16

When reporting GDP using the expenditure approach Statistics Canada divides its statistics into four major categories.List the categories of expenditures and define each one.

Accepted Answer

The largest category is final consumptio

Question 17

Gross domestic product in the economy is measured by the

Accepted Answer

A) total number of goods and services produced in the economy. 
B) dollar value of all final goods and services produced in the economy. 
C) total number of goods produced in the economy. 
D) total number of services produced in the economy. 
E) dollar value of all goods (but not services)produced in the economy. 
A) total number of goods and services produced in the economy. 
B) dollar value of all final goods and services produced in the economy. 
C) total number of goods produced in the economy. 
D) total number of services produced in the economy. 
E) dollar value of all goods (but not services)produced in the economy.

Question 18

Table 4.5   Consider the table above showing three stages of production of an automobile.
-Refer to Table 4.5.The value added by the automobile dealer equals

Accepted Answer

A) $7,000. 
B) $10,000 
C) $15,000. 
D) $18,000. 
E) $25,000. 
A) $7,000. 
B) $10,000 
C) $15,000. 
D) $18,000. 
E) $25,000.

Question 19

Which of the following are included in gross domestic product for an economy in a given year?

Accepted Answer

A) the value of intermediate goods produced in that year 
B) the value of used goods sold in that year 
C) the value of final goods produced in that year 
D) the value of stocks and bonds sold to finance the building of new factories 
E) All of the above would be included in gross domestic product for an economy in a given year. 
A) the value of intermediate goods produced in that year 
B) the value of used goods sold in that year 
C) the value of final goods produced in that year 
D) the value of stocks and bonds sold to finance the building of new factories 
E) All of the above would be included in gross domestic product for an economy in a given year.

Question 20

If income is unequally distributed in an economy, increases in GDP may not raise well-being in an economy.

Accepted Answer

A) True 
 B)False

Which of the following is counted in GDP?

Which of the following is a true statement about real and nominal GDP?

If prices are rising on average, then

Gross domestic product understates the total production of final goods and services because of the omission of

Suppose, in 2018, you purchased a house built in 2010.Which of the following would be included in the gross domestic product for 2018?

The "underground economy" is also referred to as

In periods when prices are falling, on average,

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

It is possible for nominal GDP to fall while real GDP rises.

In comparing China to the United Kingdom, China's relatively growth rate in GDP would make you more likely to take a job in China, and China's relatively level of GDP would make you less likely to take a job in China.

Investment, as defined by economists, would not include which of the following? Ford

The statistical discrepancy captures

The output of Mexican citizens who work in Ontario would be included in the

When reporting GDP using the expenditure approach Statistics Canada divides its statistics into four major categories.List the categories of expenditures and define each one.

Gross domestic product in the economy is measured by the

Table 4.5 Consider the table above showing three stages of production of an automobile. -Refer to Table 4.5.The value added by the automobile dealer equals

Which of the following are included in gross domestic product for an economy in a given year?

If income is unequally distributed in an economy, increases in GDP may not raise well-being in an economy.

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

Which of the following is counted in GDP?

Which of the following is a true statement about real and nominal GDP?

If prices are rising on average, then

Gross domestic product understates the total production of final goods and services because of the omission of

Suppose, in 2018, you purchased a house built in 2010.Which of the following would be included in the gross domestic product for 2018?

The "underground economy" is also referred to as

In periods when prices are falling, on average,

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

It is possible for nominal GDP to fall while real GDP rises.

In comparing China to the United Kingdom, China's relatively ________ growth rate in GDP would make you more likely to take a job in China, and China's relatively ________ level of GDP would make you less likely to take a job in China.

Investment, as defined by economists, would not include which of the following? Ford

The statistical discrepancy captures

The output of Mexican citizens who work in Ontario would be included in the

When reporting GDP using the expenditure approach Statistics Canada divides its statistics into four major categories.List the categories of expenditures and define each one.

Gross domestic product in the economy is measured by the

Table 4.5 Consider the table above showing three stages of production of an automobile. -Refer to Table 4.5.The value added by the automobile dealer equals

Which of the following are included in gross domestic product for an economy in a given year?

If income is unequally distributed in an economy, increases in GDP may not raise well-being in an economy.

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 comparing China to the United Kingdom, China's relatively growth rate in GDP would make you more likely to take a job in China, and China's relatively level of GDP would make you less likely to take a job in China.