Question 1

An example of a final good would be

Accepted Answer

A) the sugar sold to Tim Hortons. 
B) the whipped cream sold to Tim Hortons. 
C) an extra-large double-double sold by Tim Hortons to a student. 
D) the coffee beans sold to Tim Hortons. 
E) the paper cups sold to Tim Hortons. 
A) the sugar sold to Tim Hortons. 
B) the whipped cream sold to Tim Hortons. 
C) an extra-large double-double sold by Tim Hortons to a student. 
D) the coffee beans sold to Tim Hortons. 
E) the paper cups sold to Tim Hortons.

Question 2

An inflation rate of 5% between 2016 and 2017 would be implied by a change in the GDP deflator from ________ in 2016 to ________ in 2017.

Accepted Answer

A) 105; 115 
B) 200; 205 
C) 400; 420 
D) 375; 390 
E) 170; 175 
A) 105; 115 
B) 200; 205 
C) 400; 420 
D) 375; 390 
E) 170; 175

Question 3

Transfer payments are subtracted from net national income to get to Household income.

Accepted Answer

A) True 
 B)False

Question 4

Table 4.19   A very simple economy produces three goods: movies, burgers, and bikes.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above.
-Refer to Table 4.19.What is nominal GDP in 2017?

Accepted Answer

A) $3,320 
B) $3,690 
C) $6,360 
D) $7,035 
E) $8,340 
A) $3,320 
B) $3,690 
C) $6,360 
D) $7,035 
E) $8,340

Question 5

Net national income is equal to

Accepted Answer

A) personal income minus personal taxes. 
B) GDP minus depreciation. 
C) disposable personal income, plus depreciation, plus personal taxes. 
D) GNI plus depreciation. 
E) GDP plus taxes. 
A) personal income minus personal taxes. 
B) GDP minus depreciation. 
C) disposable personal income, plus depreciation, plus personal taxes. 
D) GNI plus depreciation. 
E) GDP plus taxes.

Question 6

Which of the following is likely to increase measured GDP?

Accepted Answer

A) A greater number of women decide to stay at home and provide day care for their children under age 5. 
B) Marijuana becomes legal to grow and sell. 
C) Tax rates increase and more people attempt to underreport their income for tax purposes. 
D) More people decide to do their own lawn maintenance and give up using a professional service. 
E) The government reduces the number of immigrants allowed into the country. 
A) A greater number of women decide to stay at home and provide day care for their children under age 5. 
B) Marijuana becomes legal to grow and sell. 
C) Tax rates increase and more people attempt to underreport their income for tax purposes. 
D) More people decide to do their own lawn maintenance and give up using a professional service. 
E) The government reduces the number of immigrants allowed into the country.

Question 7

Table 4.5   Consider the table above showing three stages of production of an automobile.
-Refer to Table 4.5.The value of each automobile in gross domestic product 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 8

Investment spending includes spending on

Accepted Answer

A) stocks. 
B) food. 
C) changes in business inventories. 
D) transfer payments. 
E) bonds. 
A) stocks. 
B) food. 
C) changes in business inventories. 
D) transfer payments. 
E) bonds.

Question 9

Explain the difference between gross domestic product and gross national income.Give an example of each.

Accepted Answer

Gross domestic product is the value of f

Question 10

If the value added of a firm is positive, will the firm necessarily have positive profits?

Accepted Answer

No.Value added equals the price of the f

Question 11

What are the differences between net national income, household income, and disposable household income?

Accepted Answer

Net national income is the total income

Question 12

The size of the underground economy would tend to decrease if the government of a country

Accepted Answer

A) decreased government regulations on businesses. 
B) made over-the-counter drugs illegal. 
C) increased income tax rates. 
D) increased business taxes. 
E) increased trade with other countries. 
A) decreased government regulations on businesses. 
B) made over-the-counter drugs illegal. 
C) increased income tax rates. 
D) increased business taxes. 
E) increased trade with other countries.

Question 13

Table 4.18  
-Refer to Table 4.18.Given the information above, what can we say has happened in the economy from 2016 to 2017?

Accepted Answer

A) The price level has fallen. 
B) The price level has risen. 
C) The price level has remained constant. 
D) Not enough information is available to determine what has happened to prices. 
A) The price level has fallen. 
B) The price level has risen. 
C) The price level has remained constant. 
D) Not enough information is available to determine what has happened to prices.

Question 14

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

Accepted Answer

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

Question 15

GDP is not a complete measure of well-being.

Accepted Answer

A) True 
 B)False

Question 16

Table 4.7  
-Refer to Table 4.7.Suppose that a simple economy produces only four goods and services: sweaters, CDs, sugar, and soft drinks.Assume one half of the sugar is used in making the soft drinks and the other half of the sugar is purchased by households.Calculate nominal GDP for this simple economy.

Accepted Answer

Nominal GDP equals (

Question 17

The GDP deflator is a measure of the price level, which is calculated as nominal GDP divided by real GDP and multiplied by 100.

Accepted Answer

A) True 
 B)False

Question 18

How are intermediate goods treated in the calculation of GDP?

Accepted Answer

A) Their value is not counted separately, but included as part of the value of the final good for which they are an input. 
B) Their value is counted separately, and their value is also included as part of the value of the final good for which they are an input. 
C) Their value is counted separately, but is not included as part of the value of the final good for which they are an input. 
D) They are included only if they are imported. 
E) Their value is deducted from the value of final goods and services. 
A) Their value is not counted separately, but included as part of the value of the final good for which they are an input. 
B) Their value is counted separately, and their value is also included as part of the value of the final good for which they are an input. 
C) Their value is counted separately, but is not included as part of the value of the final good for which they are an input. 
D) They are included only if they are imported. 
E) Their value is deducted from the value of final goods and services.

Question 19

The value of what a Canadian-owned Tim Hortons produces in South Korea is included in the Canadian ________ and the South Korean ________.

Accepted Answer

A) GDP; GDP 
B) GNI; GDP 
C) GDP; GNI 
D) GNI; GNI 
E) GNI; NNI 
A) GDP; GDP 
B) GNI; GDP 
C) GDP; GNI 
D) GNI; GNI 
E) GNI; NNI

Question 20

In calculating gross domestic product, Statistics Canada uses the sum of the market value of final goods and services produced.This means that Statistics Canada

Accepted Answer

A) simply counts the total number of goods produced in the market place and then adds them up. 
B) values goods at their market prices, multiplies them by the quantity produced, and then adds them up. 
C) simply counts the total number of goods and services produced in the marketplace and then adds them up. 
D) values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up. 
E) values goods based on surveys of Canadian people, in which they're asked to value different products, multiplies the resulting values by the quantities produced and then adds them up. 
A) simply counts the total number of goods produced in the market place and then adds them up. 
B) values goods at their market prices, multiplies them by the quantity produced, and then adds them up. 
C) simply counts the total number of goods and services produced in the marketplace and then adds them up. 
D) values goods and services at their market prices, multiplies them by the quantity produced, and then adds them up. 
E) values goods based on surveys of Canadian people, in which they're asked to value different products, multiplies the resulting values by the quantities produced and then adds them up.

An example of a final good would be

An inflation rate of 5% between 2016 and 2017 would be implied by a change in the GDP deflator from in 2016 to in 2017.

Transfer payments are subtracted from net national income to get to Household income.

Table 4.19 A very simple economy produces three goods: movies, burgers, and bikes.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above. -Refer to Table 4.19.What is nominal GDP in 2017?

Net national income is equal to

Which of the following is likely to increase measured GDP?

Table 4.5 Consider the table above showing three stages of production of an automobile. -Refer to Table 4.5.The value of each automobile in gross domestic product equals

Investment spending includes spending on

Explain the difference between gross domestic product and gross national income.Give an example of each.

If the value added of a firm is positive, will the firm necessarily have positive profits?

What are the differences between net national income, household income, and disposable household income?

The size of the underground economy would tend to decrease if the government of a country

Table 4.18 -Refer to Table 4.18.Given the information above, what can we say has happened in the economy from 2016 to 2017?

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

GDP is not a complete measure of well-being.

The GDP deflator is a measure of the price level, which is calculated as nominal GDP divided by real GDP and multiplied by 100.

How are intermediate goods treated in the calculation of GDP?

The value of what a Canadian-owned Tim Hortons produces in South Korea is included in the Canadian and the South Korean .

In calculating gross domestic product, Statistics Canada uses the sum of the market value of final goods and services produced.This means that Statistics Canada

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

An example of a final good would be

An inflation rate of 5% between 2016 and 2017 would be implied by a change in the GDP deflator from ________ in 2016 to ________ in 2017.

Transfer payments are subtracted from net national income to get to Household income.

Table 4.19 A very simple economy produces three goods: movies, burgers, and bikes.The quantities produced and their corresponding prices for 2007 and 2017 are shown in the table above. -Refer to Table 4.19.What is nominal GDP in 2017?

Net national income is equal to

Which of the following is likely to increase measured GDP?

Table 4.5 Consider the table above showing three stages of production of an automobile. -Refer to Table 4.5.The value of each automobile in gross domestic product equals

Investment spending includes spending on

Explain the difference between gross domestic product and gross national income.Give an example of each.

If the value added of a firm is positive, will the firm necessarily have positive profits?

What are the differences between net national income, household income, and disposable household income?

The size of the underground economy would tend to decrease if the government of a country

Table 4.18 -Refer to Table 4.18.Given the information above, what can we say has happened in the economy from 2016 to 2017?

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

GDP is not a complete measure of well-being.

The GDP deflator is a measure of the price level, which is calculated as nominal GDP divided by real GDP and multiplied by 100.

How are intermediate goods treated in the calculation of GDP?

The value of what a Canadian-owned Tim Hortons produces in South Korea is included in the Canadian ________ and the South Korean ________.

In calculating gross domestic product, Statistics Canada uses the sum of the market value of final goods and services produced.This means that Statistics Canada

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

An inflation rate of 5% between 2016 and 2017 would be implied by a change in the GDP deflator from in 2016 to in 2017.

The value of what a Canadian-owned Tim Hortons produces in South Korea is included in the Canadian and the South Korean .