Question 1

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 2

Roommates Grace and Kelly are sharing household chores and think they have an even exchange.If instead they paid each other for the chores the other did,what would happen to GDP?

Accepted Answer

A)  It would fall. 
B)  It would rise. 
C)  It would be unaffected because paid or not,household chores are not included in GDP. 
D)  It would be unaffected because paid or not,household chores are included in GDP. 
A)  It would fall. 
B)  It would rise. 
C)  It would be unaffected because paid or not,household chores are not included in GDP. 
D)  It would be unaffected because paid or not,household chores are included in GDP.

Question 3

Suppose Nova Scotia produces only cheese and fish.Last year,20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each.If in the base year the price of cheese was $10 per unit and the price of fish was $75 per unit,what can we conclude?

Accepted Answer

A)  Nominal GDP is $500,real GDP is $800,and the GDP deflator is 62.5 
B)  Nominal GDP is $500,real GDP is $800,and the GDP deflator is 160 
C)  Nominal GDP is $800,real GDP is $500,and the GDP deflator is 160 
D)  Nominal GDP is $800,real GDP is $500,and the GDP deflator is 62.5 
A)  Nominal GDP is $500,real GDP is $800,and the GDP deflator is 62.5 
B)  Nominal GDP is $500,real GDP is $800,and the GDP deflator is 160 
C)  Nominal GDP is $800,real GDP is $500,and the GDP deflator is 160 
D)  Nominal GDP is $800,real GDP is $500,and the GDP deflator is 62.5

Question 4

Over time,people have come to rely more on market-produced goods and less on goods that they produce for themselves.What would this change do by itself?

Accepted Answer

A)  It would make GDP fall over time. 
B)  It would not make any change in GDP over time. 
C)  It would make GDP rise over time. 
D)  It would change GDP,but in an uncertain direction. 
A)  It would make GDP fall over time. 
B)  It would not make any change in GDP over time. 
C)  It would make GDP rise over time. 
D)  It would change GDP,but in an uncertain direction.

Question 5

Which of the following best defines retained earnings?

Accepted Answer

A)  the part of income that households retain after paying taxes 
B)  the part of income that businesses retain after paying taxes 
C)  the part of income that corporations pay to their owners in the form of dividends 
D)  the part of income that corporations do not pay to their owners in the form of dividends 
A)  the part of income that households retain after paying taxes 
B)  the part of income that businesses retain after paying taxes 
C)  the part of income that corporations pay to their owners in the form of dividends 
D)  the part of income that corporations do not pay to their owners in the form of dividends

Question 6

How is gasoline treated in GDP terms?

Accepted Answer

A)  It is counted as an intermediate good. 
B)  It is counted as a final good if a company uses it to provide transportation services. 
C)  It is counted as a final good if a consumer uses it to mow her yard. 
D)  It is counted as an intermediate good if a consumer uses it to mow a friend's yard without pay. 
A)  It is counted as an intermediate good. 
B)  It is counted as a final good if a company uses it to provide transportation services. 
C)  It is counted as a final good if a consumer uses it to mow her yard. 
D)  It is counted as an intermediate good if a consumer uses it to mow a friend's yard without pay.

Question 7

David is a Canadian resident who works in Canada,where he owns a pizza business.Robert is also Canadian,but he works in the United States.On a typical day,David makes $275 in sales.Robert makes $150 in wages.There are no other costs.Based on this information,compute David and Robert's contributions to the following:
a.Canadian GDP
​b.Canadian GNP
c.U.S.GDP
d.U.S.GNP

Accepted Answer

We can use the income-based definition o

Question 8

How is flour treated in GDP terms?

Accepted Answer

A)  It is always counted as an intermediate good. 
B)  It is counted as a final good if it is used by a company to make bread. 
C)  It is counted as a final good if it is used by a consumer who bakes bread for his own consumption. 
D)  It is always counted as a final good. 
A)  It is always counted as an intermediate good. 
B)  It is counted as a final good if it is used by a company to make bread. 
C)  It is counted as a final good if it is used by a consumer who bakes bread for his own consumption. 
D)  It is always counted as a final good.

Question 9

With respect to GDP,how are welfare payments treated?

Accepted Answer

A)  They are included in GDP because they represent payment for work performed in the past. 
B)  They are included in GDP because they represent potential consumption. 
C)  They are excluded from GDP because they do not represent current government purchases of goods and services. 
D)  They are excluded from GDP because they are not private pensions. 
A)  They are included in GDP because they represent payment for work performed in the past. 
B)  They are included in GDP because they represent potential consumption. 
C)  They are excluded from GDP because they do not represent current government purchases of goods and services. 
D)  They are excluded from GDP because they are not private pensions.

Question 10

Which market is the model of supply and demand most appropriate for?

Accepted Answer

A)  markets in which there is one large seller and many buyers 
B)  markets in which there is one large buyer and many sellers 
C)  markets in which there are few sellers and few buyers 
D)  markets in which there are many sellers and many buyers 
A)  markets in which there is one large seller and many buyers 
B)  markets in which there is one large buyer and many sellers 
C)  markets in which there are few sellers and few buyers 
D)  markets in which there are many sellers and many buyers

Question 11

If a Canadian citizen buys a television made in Korea made by a Korean firm,what is the impact on net exports and GDP?

Accepted Answer

A)  Canadian net exports and Canadian GDP decrease. 
B)  Canadian net exports are unaffected,but Canadian GDP decreases. 
C)  Canadian net exports and Canadian GDP are unaffected. 
D)  Canadian net exports decrease,but Canadian GDP is unaffected. 
A)  Canadian net exports and Canadian GDP decrease. 
B)  Canadian net exports are unaffected,but Canadian GDP decreases. 
C)  Canadian net exports and Canadian GDP are unaffected. 
D)  Canadian net exports decrease,but Canadian GDP is unaffected.

Question 12

A hypothetical economy produces only two items: maple syrup and trips to a local tourist attraction.Calculate nominal GDP,real GDP,and the GDP deflator,and fill in the corresponding columns in the following table:

Accepted Answer

a.Nominal GDP = Sum of current prices ×

Question 13

What is NOT included in GDP?

Accepted Answer

A)  unpaid childcare 
B)  services such as those provided by lawyers and hairstylists 
C)  final goods that are produced but not sold by the end of the year 
D)  production of foreign citizens living in Canada 
A)  unpaid childcare 
B)  services such as those provided by lawyers and hairstylists 
C)  final goods that are produced but not sold by the end of the year 
D)  production of foreign citizens living in Canada

Question 14

In an economy consisting of only households and firms,how can GDP be computed?

Accepted Answer

A)  by calculating the average total expenditures of households and subtracting savings 
B)  by calculating the average income paid by firms only in exchange for labour 
C)  by adding up either total income paid by firms or total expenditures of households,but not both 
D)  by adding up both the total expenditures of households and the total income paid by firms 
A)  by calculating the average total expenditures of households and subtracting savings 
B)  by calculating the average income paid by firms only in exchange for labour 
C)  by adding up either total income paid by firms or total expenditures of households,but not both 
D)  by adding up both the total expenditures of households and the total income paid by firms

Question 15

In 2014,what were Canadian net exports?

Accepted Answer

A)  negative and about 10 percent of GDP 
B)  positive and about 3 percent of GDP 
C)  negative and about 1 percent of GDP 
D)  positive and about 10 percent of GDP 
A)  negative and about 10 percent of GDP 
B)  positive and about 3 percent of GDP 
C)  negative and about 1 percent of GDP 
D)  positive and about 10 percent of GDP

Question 16

Sean used to volunteer to shovel his elderly neighbour's walk,but now his neighbour pays a company to do it.How does this change affect GDP?

Accepted Answer

A)  It decreases GDP by more than the price of the service. 
B)  It increases GDP by less than the price of the service.. 
C)  It decreases GDP by the price of the service. 
D)  It increases GDP by the price of the service. 
A)  It decreases GDP by more than the price of the service. 
B)  It increases GDP by less than the price of the service.. 
C)  It decreases GDP by the price of the service. 
D)  It increases GDP by the price of the service.

Question 17

Table 5-4
Use the following table to answer the following questions.  
-Refer to the Table 5-4.Using 2013 as the base year,what can we conclude for 2014?

Accepted Answer

A)  Real GDP is $880,and the GDP deflator is 80. 
B)  Real GDP is $880,and the GDP deflator is 95 
C)  Real GDP is $880,and the GDP deflator is 125 
D)  Real GDP is $950,and the GDP deflator is 95. 
A)  Real GDP is $880,and the GDP deflator is 80. 
B)  Real GDP is $880,and the GDP deflator is 95 
C)  Real GDP is $880,and the GDP deflator is 125 
D)  Real GDP is $950,and the GDP deflator is 95.

Question 18

If GDP rises,what happens?

Accepted Answer

A)  Income and expenditure must both rise. 
B)  Income and expenditure must both fall. 
C)  Income must rise,but expenditure may rise or fall. 
D)  Expenditure must rise,but income may rise or fall. 
A)  Income and expenditure must both rise. 
B)  Income and expenditure must both fall. 
C)  Income must rise,but expenditure may rise or fall. 
D)  Expenditure must rise,but income may rise or fall.

Question 19

Suppose an economy produces only cranberries and maple syrup.Last year,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 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 125. 
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 125. 
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 20

If a province with legalized gambling made gambling illegal,then,other things the same,what would happen to GDP?

Accepted Answer

A)  It would decrease. 
B)  It would increase. 
C)  It would not change because both legal and illegal production are included in GDP. 
D)  It does not change because gambling is never included in GDP. 
A)  It would decrease. 
B)  It would increase. 
C)  It would not change because both legal and illegal production are included in GDP. 
D)  It does not change because gambling is never included in GDP.

Which of the following is counted in GDP?

Roommates Grace and Kelly are sharing household chores and think they have an even exchange.If instead they paid each other for the chores the other did,what would happen to GDP?

Suppose Nova Scotia produces only cheese and fish.Last year,20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each.If in the base year the price of cheese was $10 per unit and the price of fish was $75 per unit,what can we conclude?

Over time,people have come to rely more on market-produced goods and less on goods that they produce for themselves.What would this change do by itself?

Which of the following best defines retained earnings?

How is gasoline treated in GDP terms?

How is flour treated in GDP terms?

With respect to GDP,how are welfare payments treated?

Which market is the model of supply and demand most appropriate for?

If a Canadian citizen buys a television made in Korea made by a Korean firm,what is the impact on net exports and GDP?

A hypothetical economy produces only two items: maple syrup and trips to a local tourist attraction.Calculate nominal GDP,real GDP,and the GDP deflator,and fill in the corresponding columns in the following table:

What is NOT included in GDP?

In an economy consisting of only households and firms,how can GDP be computed?

In 2014,what were Canadian net exports?

Sean used to volunteer to shovel his elderly neighbour's walk,but now his neighbour pays a company to do it.How does this change affect GDP?

Table 5-4 Use the following table to answer the following questions. -Refer to the Table 5-4.Using 2013 as the base year,what can we conclude for 2014?

If GDP rises,what happens?

If a province with legalized gambling made gambling illegal,then,other things the same,what would happen to GDP?

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 Small 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 is counted in GDP?

Roommates Grace and Kelly are sharing household chores and think they have an even exchange.If instead they paid each other for the chores the other did,what would happen to GDP?

Suppose Nova Scotia produces only cheese and fish.Last year,20 units of cheese are sold at $5 each and 8 units of fish are sold at $50 each.If in the base year the price of cheese was $10 per unit and the price of fish was $75 per unit,what can we conclude?

Over time,people have come to rely more on market-produced goods and less on goods that they produce for themselves.What would this change do by itself?

Which of the following best defines retained earnings?

How is gasoline treated in GDP terms?

How is flour treated in GDP terms?

With respect to GDP,how are welfare payments treated?

Which market is the model of supply and demand most appropriate for?

If a Canadian citizen buys a television made in Korea made by a Korean firm,what is the impact on net exports and GDP?

A hypothetical economy produces only two items: maple syrup and trips to a local tourist attraction.Calculate nominal GDP,real GDP,and the GDP deflator,and fill in the corresponding columns in the following table:

What is NOT included in GDP?

In an economy consisting of only households and firms,how can GDP be computed?

In 2014,what were Canadian net exports?

Sean used to volunteer to shovel his elderly neighbour's walk,but now his neighbour pays a company to do it.How does this change affect GDP?

Table 5-4 Use the following table to answer the following questions. -Refer to the Table 5-4.Using 2013 as the base year,what can we conclude for 2014?

If GDP rises,what happens?

If a province with legalized gambling made gambling illegal,then,other things the same,what would happen to GDP?

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 Small 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

Filters