Question 1

Which of the following statistics is the best single measure of an economy's well-being?

Accepted Answer

A) the unemployment rate 
B) the inflation rate 
C) GDP 
D) the trade deficit 
A) the unemployment rate 
B) the inflation rate 
C) GDP 
D) the trade deficit

Question 2

Which of the following non-market goods or services is included as an estimate in Canadian GDP?

Accepted Answer

A) the value of unpaid housework 
B) the value of vegetables that people grow in their gardens 
C) the estimated rental value of owner-occupied homes 
D) the estimated value of illegal drugs 
A) the value of unpaid housework 
B) the value of vegetables that people grow in their gardens 
C) the estimated rental value of owner-occupied homes 
D) the estimated value of illegal drugs

Question 3

Which of the following is counted in GDP?

Accepted Answer

A) the estimated value of housework 
B) the value of illegally produced goods and services 
C) the value of newly issued stocks and bonds 
D) the estimated value of housing services 
A) the estimated value of housework 
B) the value of illegally produced goods and services 
C) the value of newly issued stocks and bonds 
D) the estimated value of housing services

Question 4

How are intermediate goods treated in GDP computations?

Accepted Answer

A) They are included so we can get a measure of sales. 
B) They are excluded because their value is already counted in the value of final goods. 
C) They are excluded because they are too difficult to measure. 
D) They are included because they are final goods for the firm producing them. 
A) They are included so we can get a measure of sales. 
B) They are excluded because their value is already counted in the value of final goods. 
C) They are excluded because they are too difficult to measure. 
D) They are included because they are final goods for the firm producing them.

Question 5

If Susan decides to change the oil in her car herself instead of having Speedy Lube change the oil for her, what is the impact on GDP?

Accepted Answer

A) It necessarily rises. 
B) It necessarily falls. 
C) It will be unaffected because the same service is produced in either case. 
D) It will be unaffected because car maintenance is not included in GDP. 
A) It necessarily rises. 
B) It necessarily falls. 
C) It will be unaffected because the same service is produced in either case. 
D) It will be unaffected because car maintenance is not included in GDP.

Question 6

Table 5-1
  
-Refer to Table 5-1. What is the NNP for this economy?

Accepted Answer

A) $164 
B) $170 
C) $178 
D) $192 
A) $164 
B) $170 
C) $178 
D) $192

Question 7

Table 5-1
  
-Refer to Table 5-1. What is the personal income for this economy?

Accepted Answer

A) $154 
B) $164 
C) $170 
D) $178 
A) $154 
B) $164 
C) $170 
D) $178

Question 8

What government level(s) is (are) considered when computing government purchases for GDP accounting purposes?

Accepted Answer

A) the federal government only 
B) provincial and federal governments only 
C) local, provincial, and federal governments 
D) local and provincial governments, but not the federal government 
A) the federal government only 
B) provincial and federal governments only 
C) local, provincial, and federal governments 
D) local and provincial governments, but not the federal government

Question 9

A German citizen buys an automobile produced in Canada by a Japanese company. What happens as a result?

Accepted Answer

A) Canadian net exports increase, Canadian GNP and GDP are unaffected, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected. 
B) Canadian net exports, GNP, and GDP increase; Japanese GDP increases; German net exports decrease; and German GDP is unaffected. 
C) Canadian net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GDP and GNP are unaffected. 
D) Canadian net exports, GNP, and GDP are unaffected; Japanese GNP increases; German net exports decrease; and German GDP and GNP decrease. 
A) Canadian net exports increase, Canadian GNP and GDP are unaffected, Japanese GNP increases, German net exports decrease, and German GNP and GDP are unaffected. 
B) Canadian net exports, GNP, and GDP increase; Japanese GDP increases; German net exports decrease; and German GDP is unaffected. 
C) Canadian net exports and GDP increase, Japanese GNP increases, German net exports decrease, and German GDP and GNP are unaffected. 
D) Canadian net exports, GNP, and GDP are unaffected; Japanese GNP increases; German net exports decrease; and German GDP and GNP decrease.

Question 10

In computing GDP, what is investment?

Accepted Answer

A) spending on stocks, bonds, and other financial assets 
B) spending on real estate and financial assets 
C) spending on new capital equipment, inventories, and structures, including new housing 
D) spending on capital equipment, inventories, and structures, excluding household purchases of new housing 
A) spending on stocks, bonds, and other financial assets 
B) spending on real estate and financial assets 
C) spending on new capital equipment, inventories, and structures, including new housing 
D) spending on capital equipment, inventories, and structures, excluding household purchases of new housing

Question 11

Which of the following is included in the investment component of GDP?

Accepted Answer

A) purchases of stocks and bonds 
B) purchases of capital equipment that was manufactured in a foreign country by a foreign firm 
C) the estimated rental value of owner-occupied housing 
D) purchases of new durable goods and appliances 
A) purchases of stocks and bonds 
B) purchases of capital equipment that was manufactured in a foreign country by a foreign firm 
C) the estimated rental value of owner-occupied housing 
D) purchases of new durable goods and appliances

Question 12

A professional gambler moves from a province where gambling is legal to a province where gambling is illegal. What impact does this move have on Canada's GDP?

Accepted Answer

A) It raises GDP. 
B) It decreases GDP. 
C) It does not change GDP because gambling is never included in GDP. 
D) It does not change GDP because in either case his income is included. 
A) It raises GDP. 
B) It decreases GDP. 
C) It does not change GDP because gambling is never included in GDP. 
D) It does not change GDP because in either case his income is included.

Question 13

Table 5-3.
Prices and Quantities
  
-Refer to Table 5-3. What is the nominal GDP?

Accepted Answer

A) $680 for 2008, $880 for 2009, and $1200 for 2010 
B) $760 for 2008, $880 for 2009, and $1000 for 2010 
C) $760 for 2008, $1100 for 2009, and $1600 for 2010 
D) $960 for 2008, $1280 for 2009, and $1300 for 2010 
A) $680 for 2008, $880 for 2009, and $1200 for 2010 
B) $760 for 2008, $880 for 2009, and $1000 for 2010 
C) $760 for 2008, $1100 for 2009, and $1600 for 2010 
D) $960 for 2008, $1280 for 2009, and $1300 for 2010

Question 14

If a small country has current nominal GDP of $25 billion and the GDP deflator is 125, what is its real GDP?

Accepted Answer

A) $312.5 billion 
B) $207.5 billion 
C) $31.25 billion 
D) $20 billion 
A) $312.5 billion 
B) $207.5 billion 
C) $31.25 billion 
D) $20 billion

Question 15

In the country of Mainia, GDP consists of cranberries and maple syrup. In 2010, 50 units of cranberries are sold at $20 per unit, and 100 units of maple syrup are sold at $10 per unit. If the price of cranberries was $10 per unit and the price of maple syrup was $15.00 per unit in the base year, what can we conclude?

Accepted Answer

A) Nominal GDP is $2500, real GDP is $2000, and the GDP deflator is 83.3. 
B) Nominal GDP is $2000, real GDP is $2500, and the GDP deflator is 125. 
C) Nominal GDP is $2000, real GDP is $2000, and the GDP deflator is 100. 
D) Nominal GDP is 2500, real GDP is 2500, and the GDP deflator is 100. 
A) Nominal GDP is $2500, real GDP is $2000, and the GDP deflator is 83.3. 
B) Nominal GDP is $2000, real GDP is $2500, and the GDP deflator is 125. 
C) Nominal GDP is $2000, real GDP is $2000, and the GDP deflator is 100. 
D) Nominal GDP is 2500, real GDP is 2500, and the GDP deflator is 100.

Question 16

In a simple circular-flow diagram, how are total income and total expenditure interrelated?

Accepted Answer

A) They are seldom equal because of the dynamic changes that occur in an economy. 
B) They are equal only when all goods and services produced are sold. 
C) They are always equal because every transaction has a buyer and a seller. 
D) They are always equal because of accounting rules. 
A) They are seldom equal because of the dynamic changes that occur in an economy. 
B) They are equal only when all goods and services produced are sold. 
C) They are always equal because every transaction has a buyer and a seller. 
D) They are always equal because of accounting rules.

Question 17

A Canadian publisher purchases new computers. What impact does this purchase have on investment and GDP?

Accepted Answer

A) It makes investment and GDP higher. 
B) It makes investment higher and leaves GDP unchanged. 
C) It makes investment higher and reduces GDP. 
D) It makes neither investment nor GDP higher. 
A) It makes investment and GDP higher. 
B) It makes investment higher and leaves GDP unchanged. 
C) It makes investment higher and reduces GDP. 
D) It makes neither investment nor GDP higher.

Question 18

Table 5-3.
Prices and Quantities
  
-Refer to Table 5-3. What is the nominal GDP for 2009?

Accepted Answer

A) $900 
B) $1000 
C) $1100 
D) $1250 
A) $900 
B) $1000 
C) $1100 
D) $1250

Question 19

Dave, a student who knits ski caps with tassels, sells the same number of caps this year as last year, but at 20 percent higher prices. What can we conclude?

Accepted Answer

A) He must be better off than last year because his income is higher. 
B) We do not have enough information to tell whether he is better off this year than last year. 
C) He cannot be better off than last year because he sold the same number of caps both years. 
D) He is better off this year only if there was no inflation over the past year. 
A) He must be better off than last year because his income is higher. 
B) We do not have enough information to tell whether he is better off this year than last year. 
C) He cannot be better off than last year because he sold the same number of caps both years. 
D) He is better off this year only if there was no inflation over the past year.

Question 20

The following table shows GDP data of a hypothetical economy that produces only two items: maple syrup and trips to a local touristic attraction.
  
-Calculate the percentage changes in nominal GDP, real GDP, and GDP deflator.

Accepted Answer

The percentage change in nominal GDP fro

Which of the following statistics is the best single measure of an economy's well-being?

Which of the following non-market goods or services is included as an estimate in Canadian GDP?

Which of the following is counted in GDP?

How are intermediate goods treated in GDP computations?

If Susan decides to change the oil in her car herself instead of having Speedy Lube change the oil for her, what is the impact on GDP?

Table 5-1 -Refer to Table 5-1. What is the NNP for this economy?

Table 5-1 -Refer to Table 5-1. What is the personal income for this economy?

What government level(s) is (are) considered when computing government purchases for GDP accounting purposes?

A German citizen buys an automobile produced in Canada by a Japanese company. What happens as a result?

In computing GDP, what is investment?

Which of the following is included in the investment component of GDP?

A professional gambler moves from a province where gambling is legal to a province where gambling is illegal. What impact does this move have on Canada's GDP?

Table 5-3. Prices and Quantities -Refer to Table 5-3. What is the nominal GDP?

If a small country has current nominal GDP of $25 billion and the GDP deflator is 125, what is its real GDP?

In a simple circular-flow diagram, how are total income and total expenditure interrelated?

A Canadian publisher purchases new computers. What impact does this purchase have on investment and GDP?

Table 5-3. Prices and Quantities -Refer to Table 5-3. What is the nominal GDP for 2009?

Dave, a student who knits ski caps with tassels, sells the same number of caps this year as last year, but at 20 percent higher prices. What can we conclude?

The following table shows GDP data of a hypothetical economy that produces only two items: maple syrup and trips to a local touristic attraction. -Calculate the percentage changes in nominal GDP, real GDP, and GDP deflator.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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Exam 5: Measuring a Nations Income

Which of the following statistics is the best single measure of an economy's well-being?

Which of the following non-market goods or services is included as an estimate in Canadian GDP?

Which of the following is counted in GDP?

How are intermediate goods treated in GDP computations?

If Susan decides to change the oil in her car herself instead of having Speedy Lube change the oil for her, what is the impact on GDP?

Table 5-1 -Refer to Table 5-1. What is the NNP for this economy?

Table 5-1 -Refer to Table 5-1. What is the personal income for this economy?

What government level(s) is (are) considered when computing government purchases for GDP accounting purposes?

A German citizen buys an automobile produced in Canada by a Japanese company. What happens as a result?

In computing GDP, what is investment?

Which of the following is included in the investment component of GDP?

A professional gambler moves from a province where gambling is legal to a province where gambling is illegal. What impact does this move have on Canada's GDP?

Table 5-3. Prices and Quantities -Refer to Table 5-3. What is the nominal GDP?

If a small country has current nominal GDP of $25 billion and the GDP deflator is 125, what is its real GDP?

In a simple circular-flow diagram, how are total income and total expenditure interrelated?

A Canadian publisher purchases new computers. What impact does this purchase have on investment and GDP?

Table 5-3. Prices and Quantities -Refer to Table 5-3. What is the nominal GDP for 2009?

Dave, a student who knits ski caps with tassels, sells the same number of caps this year as last year, but at 20 percent higher prices. What can we conclude?

The following table shows GDP data of a hypothetical economy that produces only two items: maple syrup and trips to a local touristic attraction. -Calculate the percentage changes in nominal GDP, real GDP, and GDP deflator.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Unemployment and Its Natural Rate

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Five Debates Over Macroeconomic Policy

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