Question 1

GDP is used as the basic measure of a society's economic well-being.What is a better measure of the economic well-being of individuals in society?

Accepted Answer

A)  GDP per person 
B)  the consumption component of GDP 
C)  government expenditures per person 
D)  the level of business investment 
A)  GDP per person 
B)  the consumption component of GDP 
C)  government expenditures per person 
D)  the level of business investment

Question 2

A country reported nominal GDP of $200 billion in 2015 and $180 billion in 2014 and reported a GDP deflator of 125 in 2015 and 105 in 2014.What happened to real output and prices from 2014 to 2015?

Accepted Answer

A)  Real output and prices both rose. 
B)  Real output rose and prices fell. 
C)  Real output fell and prices rose. 
D)  Real output and prices both fell. 
A)  Real output and prices both rose. 
B)  Real output rose and prices fell. 
C)  Real output fell and prices rose. 
D)  Real output and prices both fell.

Question 3

After the terrorist attacks on September 11,2001,governments raised expenditures to increase security at airports.How are these purchases of goods and services treated in GDP?

Accepted Answer

A)  They are not included in GDP since they are not productive. 
B)  They are not included in GDP since governments will have to raise taxes to pay for them. 
C)  They are included in GDP since government expenditures are included in GDP. 
D)  They are included in GDP only to the extent that the federal,but not provincial or local governments,paid for them. 
A)  They are not included in GDP since they are not productive. 
B)  They are not included in GDP since governments will have to raise taxes to pay for them. 
C)  They are included in GDP since government expenditures are included in GDP. 
D)  They are included in GDP only to the extent that the federal,but not provincial or local governments,paid for them.

Question 4

Which statement best describes the evolution of the Canadian economy over the past decades?

Accepted Answer

A)  Real GDP in 2014 was less than three times its level in 1970. 
B)  The output of goods and services grew on average about 1 percent per year from 1970 to 2014. 
C)  Real GDP was approximately constant over the past decades,only prices have increased. 
D)  Growth in real GDP has allowed an improvement in Canadians' standard of living. 
A)  Real GDP in 2014 was less than three times its level in 1970. 
B)  The output of goods and services grew on average about 1 percent per year from 1970 to 2014. 
C)  Real GDP was approximately constant over the past decades,only prices have increased. 
D)  Growth in real GDP has allowed an improvement in Canadians' standard of living.

Question 5

In Canada,GDP is reported each quarter.How are these numbers computed?

Accepted Answer

A)  These numbers are adjusted to make them measure at annual and seasonally adjusted rates. 
B)  These numbers are adjusted to make them annual rates,but no adjustment for seasonal variations is made. 
C)  These numbers are quarterly rates that have been seasonally adjusted. 
D)  These numbers are at quarterly rates and have not been seasonally adjusted. 
A)  These numbers are adjusted to make them measure at annual and seasonally adjusted rates. 
B)  These numbers are adjusted to make them annual rates,but no adjustment for seasonal variations is made. 
C)  These numbers are quarterly rates that have been seasonally adjusted. 
D)  These numbers are at quarterly rates and have not been seasonally adjusted.

Question 6

Stephanie buys a designer dress produced by a Canadian-owned fashion shop in France.As a result,Canadian consumption increases.What happens as a result?

Accepted Answer

A)  Canadian net exports decrease,Canadian GNP increases,and French GDP is unaffected. 
B)  Canadian net exports decrease,Canadian GDP increases,and Canadian GNP is unaffected. 
C)  Canadian net exports decrease,Canadian GDP is unaffected,and Canadian GNP increases. 
D)  Canadian net exports are unaffected,Canadian GDP is unaffected,and French GDP increases. 
A)  Canadian net exports decrease,Canadian GNP increases,and French GDP is unaffected. 
B)  Canadian net exports decrease,Canadian GDP increases,and Canadian GNP is unaffected. 
C)  Canadian net exports decrease,Canadian GDP is unaffected,and Canadian GNP increases. 
D)  Canadian net exports are unaffected,Canadian GDP is unaffected,and French GDP increases.

Question 7

A Manitoba farmer buys a new tractor made in Alberta by a German company.What is the impact on investment and GDP?

Accepted Answer

A)  Canadian investment and German GDP increase,but Canadian GDP is unaffected. 
B)  Canadian investment and GDP increase,but German GDP is unaffected. 
C)  Canadian investment,Canadian GDP,and German GDP are unaffected,because tractors are intermediate goods. 
D)  Canadian investment,Canadian GDP,and German GDP all increase. 
A)  Canadian investment and German GDP increase,but Canadian GDP is unaffected. 
B)  Canadian investment and GDP increase,but German GDP is unaffected. 
C)  Canadian investment,Canadian GDP,and German GDP are unaffected,because tractors are intermediate goods. 
D)  Canadian investment,Canadian GDP,and German GDP all increase.

Question 8

Which term refers to income that households and noncorporate businesses receive called?

Accepted Answer

A)  disposable personal income 
B)  aggregate income 
C)  national income 
D)  personal income 
A)  disposable personal income 
B)  aggregate income 
C)  national income 
D)  personal income

Question 9

A country reported a nominal GDP of $100 billion in 2015 and $75 billion in 2014 and reported a GDP deflator of 125 in 2015 and 120 in 2014.What happened to real output and prices from 2014 to 2015?

Accepted Answer

A)  Real output and prices both rose. 
B)  Real output rose and prices fell. 
C)  Real output fell and prices rose. 
D)  Real output and prices both fell. 
A)  Real output and prices both rose. 
B)  Real output rose and prices fell. 
C)  Real output fell and prices rose. 
D)  Real output and prices both fell.

Question 10

Table 5-4
Use the following table to answer the following questions.  
-Refer to the Table 5-4.What is the nominal GDP?

Accepted Answer

A)  $680 for 2013,$880 for 2014,and $1200 for 2015 
B)  $760 for 2013,$880 for 2014,and $1000 for 2015 
C)  $760 for 2013,$1100 for 2014,and $1600 for 2015 
D)  $960 for 2013,$1280 for 2014,and $1300 for 2015 
A)  $680 for 2013,$880 for 2014,and $1200 for 2015 
B)  $760 for 2013,$880 for 2014,and $1000 for 2015 
C)  $760 for 2013,$1100 for 2014,and $1600 for 2015 
D)  $960 for 2013,$1280 for 2014,and $1300 for 2015

Question 11

A country reported a nominal GDP of $85 billion in 2015 and $100 billion in 2014 and reported a GDP deflator of 100 in 2015 and 105 in 2014.What happened to real output and prices from 2014 to 2015?

Accepted Answer

A)  Real output and prices both rose. 
B)  Real output rose and prices fell. 
C)  Real output and prices both fell. 
D)  Real output fell and prices rose. 
A)  Real output and prices both rose. 
B)  Real output rose and prices fell. 
C)  Real output and prices both fell. 
D)  Real output fell and prices rose.

Question 12

The local Nissan dealership has an increase in inventory of 25 cars in 2015.How will the sale of all 25 cars in 2016 affect the GDP?

Accepted Answer

A)  The value of the cars will be counted as part of GDP in 2015 but not in 2016. 
B)  The value of the cars will not affect the 2015 GDP,but will be included in 2016 GDP. 
C)  The value of the cars will be included in both 2015 and 2016 GDP. 
D)  The value of the cars will not be included in GDP in 2015 or 2016. 
A)  The value of the cars will be counted as part of GDP in 2015 but not in 2016. 
B)  The value of the cars will not affect the 2015 GDP,but will be included in 2016 GDP. 
C)  The value of the cars will be included in both 2015 and 2016 GDP. 
D)  The value of the cars will not be included in GDP in 2015 or 2016.

Question 13

In the national income accounts,what is depreciation called?

Accepted Answer

A)  total consumption depreciation 
B)  capital consumption allowance 
C)  consumption of circulating capital 
D)  loss due to wear 
A)  total consumption depreciation 
B)  capital consumption allowance 
C)  consumption of circulating capital 
D)  loss due to wear

Question 14

If GDP in the fourth quarter is announced to be $1.6 trillion,what does this number reflect?

Accepted Answer

A)  the actual amount of final goods and services produced in the fourth quarter 
B)  about four times the annual GDP rate 
C)  a somewhat lower amount than the amount actually produced in the fourth quarter,because GDP is seasonally adjusted,and nonseasonally adjusted GDP for the fourth quarter is typical higher 
D)  about four times the amount actually produced in that quarter,plus what had been removed for seasonal adjustment 
A)  the actual amount of final goods and services produced in the fourth quarter 
B)  about four times the annual GDP rate 
C)  a somewhat lower amount than the amount actually produced in the fourth quarter,because GDP is seasonally adjusted,and nonseasonally adjusted GDP for the fourth quarter is typical higher 
D)  about four times the amount actually produced in that quarter,plus what had been removed for seasonal adjustment

Question 15

George buys and lives in a newly constructed home he paid $200,000 for in 2015.He sells the house in 2016 for $225,000.How is GDP impacted?

Accepted Answer

A)  The 2016 sale increases 2016 GDP by $225,000 and does nothing to 2015 GDP. 
B)  The 2016 sale increases 2016 GDP by $25,000 and does nothing to 2015 GDP. 
C)  The 2016 sale does not increase 2016 GDP and does nothing to 2015 GDP. 
D)  The 2016 sale increases 2016 GDP by $225,000,and 2015 GDP is revised upward by $25,000. 
A)  The 2016 sale increases 2016 GDP by $225,000 and does nothing to 2015 GDP. 
B)  The 2016 sale increases 2016 GDP by $25,000 and does nothing to 2015 GDP. 
C)  The 2016 sale does not increase 2016 GDP and does nothing to 2015 GDP. 
D)  The 2016 sale increases 2016 GDP by $225,000,and 2015 GDP is revised upward by $25,000.

Question 16

An economy produces only eggs and ham.Last year,it produced 100 units of eggs at $3 each and 50 units of ham at $4 each.If in the base year eggs sold for $1.50 per unit and ham sold for $5 per unit,what can we conclude?

Accepted Answer

A)  Nominal GDP is $500,real GDP is $400,and the GDP deflator is 80. 
B)  Nominal GDP is $500,real GDP is $400 and the GDP deflator is 125. 
C)  Nominal GDP is $400,real GDP is $500,and the GDP deflator is 80. 
D)  Nominal GDP is $400,real GDP is $500,and the GDP deflator is 125. 
A)  Nominal GDP is $500,real GDP is $400,and the GDP deflator is 80. 
B)  Nominal GDP is $500,real GDP is $400 and the GDP deflator is 125. 
C)  Nominal GDP is $400,real GDP is $500,and the GDP deflator is 80. 
D)  Nominal GDP is $400,real GDP is $500,and the GDP deflator is 125.

Question 17

Which nonmarket good or service 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 volunteer work 
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 volunteer work

Question 18

What is the difference between nominal and real GDP?

Accepted Answer

A)  Nominal GDP values production at current prices,while real GDP values production at constant prices. 
B)  Nominal GDP values production at constant prices,while real GDP values production at current prices. 
C)  Nominal GDP values production at market prices,while real GDP values production at the cost of the resources used in the production process. 
D)  Nominal GDP consistently underestimates the value of production,while real GDP consistently overestimates the value of production. 
A)  Nominal GDP values production at current prices,while real GDP values production at constant prices. 
B)  Nominal GDP values production at constant prices,while real GDP values production at current prices. 
C)  Nominal GDP values production at market prices,while real GDP values production at the cost of the resources used in the production process. 
D)  Nominal GDP consistently underestimates the value of production,while real GDP consistently overestimates the value of production.

Question 19

Table 5-4
Use the following table to answer the following questions.  
-Refer to the Table 5-4.Using the GDP deflator to measure the average level of prices and using 2013 as the base year,what is the economy's inflation rate?

Accepted Answer

A)  20 percent for 2014 and 12.5 percent for 2015 
B)  20 percent for 2014 and 30 percent for 2015 
C)  25 percent for 2014 and 28 percent for 2015 
D)  44.7 percent for 2014 and 45.5 percent for 2015 
A)  20 percent for 2014 and 12.5 percent for 2015 
B)  20 percent for 2014 and 30 percent for 2015 
C)  25 percent for 2014 and 28 percent for 2015 
D)  44.7 percent for 2014 and 45.5 percent for 2015

Question 20

Which statement best describes the evolution of the Canadian economy over the past decades?

Accepted Answer

A)  Real GDP grew on average about 3 percent per year from 1970 to 2014. 
B)  Real GDP was approximately constant over the past decades. 
C)  The growth of real GDP has been steady over time. 
D)  There were no recessions over the period 1970 to 2014. 
A)  Real GDP grew on average about 3 percent per year from 1970 to 2014. 
B)  Real GDP was approximately constant over the past decades. 
C)  The growth of real GDP has been steady over time. 
D)  There were no recessions over the period 1970 to 2014.

GDP is used as the basic measure of a society's economic well-being.What is a better measure of the economic well-being of individuals in society?

A country reported nominal GDP of $200 billion in 2015 and $180 billion in 2014 and reported a GDP deflator of 125 in 2015 and 105 in 2014.What happened to real output and prices from 2014 to 2015?

After the terrorist attacks on September 11,2001,governments raised expenditures to increase security at airports.How are these purchases of goods and services treated in GDP?

Which statement best describes the evolution of the Canadian economy over the past decades?

In Canada,GDP is reported each quarter.How are these numbers computed?

Stephanie buys a designer dress produced by a Canadian-owned fashion shop in France.As a result,Canadian consumption increases.What happens as a result?

A Manitoba farmer buys a new tractor made in Alberta by a German company.What is the impact on investment and GDP?

Which term refers to income that households and noncorporate businesses receive called?

A country reported a nominal GDP of $100 billion in 2015 and $75 billion in 2014 and reported a GDP deflator of 125 in 2015 and 120 in 2014.What happened to real output and prices from 2014 to 2015?

Table 5-4 Use the following table to answer the following questions. -Refer to the Table 5-4.What is the nominal GDP?

A country reported a nominal GDP of $85 billion in 2015 and $100 billion in 2014 and reported a GDP deflator of 100 in 2015 and 105 in 2014.What happened to real output and prices from 2014 to 2015?

The local Nissan dealership has an increase in inventory of 25 cars in 2015.How will the sale of all 25 cars in 2016 affect the GDP?

In the national income accounts,what is depreciation called?

If GDP in the fourth quarter is announced to be $1.6 trillion,what does this number reflect?

George buys and lives in a newly constructed home he paid $200,000 for in 2015.He sells the house in 2016 for $225,000.How is GDP impacted?

An economy produces only eggs and ham.Last year,it produced 100 units of eggs at $3 each and 50 units of ham at $4 each.If in the base year eggs sold for $1.50 per unit and ham sold for $5 per unit,what can we conclude?

Which nonmarket good or service is included as an estimate in Canadian GDP?

What is the difference between nominal and real GDP?

Table 5-4 Use the following table to answer the following questions. -Refer to the Table 5-4.Using the GDP deflator to measure the average level of prices and using 2013 as the base year,what is the economy's inflation rate?

Which statement best describes the evolution of the Canadian economy over the past decades?

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

GDP is used as the basic measure of a society's economic well-being.What is a better measure of the economic well-being of individuals in society?

A country reported nominal GDP of $200 billion in 2015 and $180 billion in 2014 and reported a GDP deflator of 125 in 2015 and 105 in 2014.What happened to real output and prices from 2014 to 2015?

After the terrorist attacks on September 11,2001,governments raised expenditures to increase security at airports.How are these purchases of goods and services treated in GDP?

Which statement best describes the evolution of the Canadian economy over the past decades?

In Canada,GDP is reported each quarter.How are these numbers computed?

Stephanie buys a designer dress produced by a Canadian-owned fashion shop in France.As a result,Canadian consumption increases.What happens as a result?

A Manitoba farmer buys a new tractor made in Alberta by a German company.What is the impact on investment and GDP?

Which term refers to income that households and noncorporate businesses receive called?

A country reported a nominal GDP of $100 billion in 2015 and $75 billion in 2014 and reported a GDP deflator of 125 in 2015 and 120 in 2014.What happened to real output and prices from 2014 to 2015?

Table 5-4 Use the following table to answer the following questions. -Refer to the Table 5-4.What is the nominal GDP?

A country reported a nominal GDP of $85 billion in 2015 and $100 billion in 2014 and reported a GDP deflator of 100 in 2015 and 105 in 2014.What happened to real output and prices from 2014 to 2015?

The local Nissan dealership has an increase in inventory of 25 cars in 2015.How will the sale of all 25 cars in 2016 affect the GDP?

In the national income accounts,what is depreciation called?

If GDP in the fourth quarter is announced to be $1.6 trillion,what does this number reflect?

George buys and lives in a newly constructed home he paid $200,000 for in 2015.He sells the house in 2016 for $225,000.How is GDP impacted?

An economy produces only eggs and ham.Last year,it produced 100 units of eggs at $3 each and 50 units of ham at $4 each.If in the base year eggs sold for $1.50 per unit and ham sold for $5 per unit,what can we conclude?

Which nonmarket good or service is included as an estimate in Canadian GDP?

What is the difference between nominal and real GDP?

Table 5-4 Use the following table to answer the following questions. -Refer to the Table 5-4.Using the GDP deflator to measure the average level of prices and using 2013 as the base year,what is the economy's inflation rate?

Which statement best describes the evolution of the Canadian economy over the past decades?

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