Question 1

When economists talk about growth in the economy,how do they measure that growth?

Accepted Answer

A)  with the absolute change in nominal GDP 
B)  with the percentage change in real GDP 
C)  with the absolute change in real GDP 
D)  with the percentage change in nominal GDP 
A)  with the absolute change in nominal GDP 
B)  with the percentage change in real GDP 
C)  with the absolute change in real GDP 
D)  with the percentage change in nominal GDP

Question 2

The basic tools of supply and demand analysis are as central to macroeconomic analysis as they are to microeconomic analysis.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following best defines national income?

Accepted Answer

A)  all income produced within a country 
B)  the total income earned by a nation's residents from the production of goods and services within the borders of the country 
C)  the total income earned by a nation's residents in the production of goods and services 
D)  the income received by the national government 
A)  all income produced within a country 
B)  the total income earned by a nation's residents from the production of goods and services within the borders of the country 
C)  the total income earned by a nation's residents in the production of goods and services 
D)  the income received by the national government

Question 4

How is Canadian GNP calculated from Canadian GDP?

Accepted Answer

A)  by including income earned by foreigners in Canada and excluding income earned by Canadian citizens abroad 
B)  by including income earned by Canadian citizens abroad and excluding income earned by foreigners in Canada 
C)  by including income earned by foreigners in Canada 
D)  by excluding income earned by Canadian citizens abroad 
A)  by including income earned by foreigners in Canada and excluding income earned by Canadian citizens abroad 
B)  by including income earned by Canadian citizens abroad and excluding income earned by foreigners in Canada 
C)  by including income earned by foreigners in Canada 
D)  by excluding income earned by Canadian citizens abroad

Question 5

In Canada in 2014,what percentage of GDP was consumption?

Accepted Answer

A)  46 
B)  54 
C)  68 
D)  79 
A)  46 
B)  54 
C)  68 
D)  79

Question 6

Ryan is a Canadian resident who lives with his family in Victoria,Canada,but works for a small donut cafe in Seattle,U.S.,where he commutes every day.On a typical day,Ryan produces 400 donuts that sell for $1 apiece.Of the revenue from selling the donuts,Ryan is paid $200 per day.The remaining $200 revenue is distributed as follows: $50 pays for inputs such as water,flour,sugar,butter,and energy,$100 is rent for using the facilities and interest for an initial loan to start the business,and $50 goes to salary to the manager and profit to the owner of the café.
​
a)How much is the increase in U.S.GDP and GNP generated by the production of the 400 donuts?
b)How much is the increase in Canada's GDP and GNP generated by the production of the 400 donuts?
c)How much is Ryan's contribution to the creation of the $400 value of donuts? Explain your answer.
d)Since Ryan takes his income home to Canada,should the U.S.allow foreign workers such as Ryan to take jobs that might otherwise go to American workers?

Accepted Answer

a)U.S.GDP increases by the value of the

Question 7

Which of the following is counted in Canadian GDP?

Accepted Answer

A)  goods and services produced by Canadian citizens working in the U.S. 
B)  American intermediate goods used in the production of Canadian final goods 
C)  Canadian final goods and services purchased by the American government 
D)  American final goods and services purchased by the Canadian government 
A)  goods and services produced by Canadian citizens working in the U.S. 
B)  American intermediate goods used in the production of Canadian final goods 
C)  Canadian final goods and services purchased by the American government 
D)  American final goods and services purchased by the Canadian government

Question 8

Which example would be included in Canadian consumption?

Accepted Answer

A)  A Canadian resident buys a car manufactured in Brazil. 
B)  A French resident buys a new house in Canada 
C)  Beverly buys a newly issued share in a Canadian corporation 
D)  Samantha produces some artwork to decorate her house. 
A)  A Canadian resident buys a car manufactured in Brazil. 
B)  A French resident buys a new house in Canada 
C)  Beverly buys a newly issued share in a Canadian corporation 
D)  Samantha produces some artwork to decorate her house.

Question 9

Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments).What is included in GDP?

Accepted Answer

A)  The rent was included in GDP; the purchases of the condominiums are not included. 
B)  The rent was included in GDP,and so is the purchase of the condominiums. 
C)  The rent was not included in GDP; the purchases of the condominiums are included. 
D)  The rent was not included in GDP; the purchases are not included either. 
A)  The rent was included in GDP; the purchases of the condominiums are not included. 
B)  The rent was included in GDP,and so is the purchase of the condominiums. 
C)  The rent was not included in GDP; the purchases of the condominiums are included. 
D)  The rent was not included in GDP; the purchases are not included either.

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 for 2014?

Accepted Answer

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

Question 11

What does personal income include and exclude?

Accepted Answer

A)  It includes retained earnings,corporate income taxes,and social insurance contributions,and excludes interest and transfer payments received by households from government. 
B)  It excludes retained earnings,corporate income taxes,social insurance contributions,and interest,and includes transfer payments received by households from government. 
C)  It excludes retained earnings,corporate income taxes,and social insurance contributions,and includes interest and transfer payments received by households from government. 
D)  It includes retained earnings,corporate income taxes,social insurance contributions,and interest,and excludes transfer payments received by households from government. 
A)  It includes retained earnings,corporate income taxes,and social insurance contributions,and excludes interest and transfer payments received by households from government. 
B)  It excludes retained earnings,corporate income taxes,social insurance contributions,and interest,and includes transfer payments received by households from government. 
C)  It excludes retained earnings,corporate income taxes,and social insurance contributions,and includes interest and transfer payments received by households from government. 
D)  It includes retained earnings,corporate income taxes,social insurance contributions,and interest,and excludes transfer payments received by households from government.

Question 12

Which statement best represents a transfer payment?

Accepted Answer

A)  You transfer $1000 from your bank account to a mutual fund. 
B)  The bank transfers $10 quarterly interest to your savings account. 
C)  The government sends your grandfather his pension cheque. 
D)  Your employer automatically transfers $100 each month from your wages to a nontaxable medical spending account. 
A)  You transfer $1000 from your bank account to a mutual fund. 
B)  The bank transfers $10 quarterly interest to your savings account. 
C)  The government sends your grandfather his pension cheque. 
D)  Your employer automatically transfers $100 each month from your wages to a nontaxable medical spending account.

Question 13

In the nation of Ophelia,quarterly GDP is always higher in the second quarter than in other quarters.In order to account for this predictable jump in GDP,what will Ophelia's government statisticians most likely do?

Accepted Answer

A)  Make sure to account for inventory changes during the second quarter. 
B)  Report real GDP,not nominal GDP. 
C)  Focus on GNP rather than GDP during the second quarter. 
D)  Make a seasonal adjustment for the second quarter data. 
A)  Make sure to account for inventory changes during the second quarter. 
B)  Report real GDP,not nominal GDP. 
C)  Focus on GNP rather than GDP during the second quarter. 
D)  Make a seasonal adjustment for the second quarter data.

Question 14

How are intermediate goods accounted for when calculating GDP?

Accepted Answer

A)  The value of all intermediate goods is included in GDP. 
B)  The value of intermediate goods is included in GDP only if they were produced in the previous year. 
C)  The value of intermediate goods is included in GDP only if they are purchased by firms rather than households. 
D)  The value of intermediate goods is not included in GDP unless they are part of inventory. 
A)  The value of all intermediate goods is included in GDP. 
B)  The value of intermediate goods is included in GDP only if they were produced in the previous year. 
C)  The value of intermediate goods is included in GDP only if they are purchased by firms rather than households. 
D)  The value of intermediate goods is not included in GDP unless they are part of inventory.

Question 15

How are nominal GDP and real GDP related?

Accepted Answer

A)  Nominal GDP measures base-year production using base-year prices,while real GDP measures current production using current prices. 
B)  Nominal GDP measures current production using base-year prices,while real GDP measures current production using current prices. 
C)  Nominal GDP measures current production using current prices,while real GDP measures current production using base-year prices. 
D)  Nominal GDP measures current production using current prices,while real GDP measures base-year production using base-year prices. 
A)  Nominal GDP measures base-year production using base-year prices,while real GDP measures current production using current prices. 
B)  Nominal GDP measures current production using base-year prices,while real GDP measures current production using current prices. 
C)  Nominal GDP measures current production using current prices,while real GDP measures current production using base-year prices. 
D)  Nominal GDP measures current production using current prices,while real GDP measures base-year production using base-year prices.

Question 16

Table 5-2  
-Refer to the Table 5-2.What is the NNP for this economy?

Accepted Answer

A)  $380 
B)  $388 
C)  $394 
D)  $405 
A)  $380 
B)  $388 
C)  $394 
D)  $405

Question 17

In a given year,an economy has consumption of $6000,investment of $4000,government purchases of $3500,exports of $1500,imports of $1600,taxes of $1200,transfer payments of $1400,and depreciation of $1300.What is the GDP?

Accepted Answer

A)  $11,200 
B)  $13,400 
C)  $14,600 
D)  $17,300 
A)  $11,200 
B)  $13,400 
C)  $14,600 
D)  $17,300

Question 18

A wind farm in Manitoba buys a large turbine generator from a Swedish-owned factory located in Ontario and using local workers.What happens as a result?

Accepted Answer

A)  Canadian investment,GDP,and GNP all increase by the same amount. 
B)  Canadian investment increases,but GDP and GNP are unaffected by the purchase. 
C)  Canadian investment and GDP increase by the same amount,but Canadian GNP increases by a smaller amount. 
D)  Canadian investment and GNP increase by the same amount,but Canadian GDP increases by a smaller amount. 
A)  Canadian investment,GDP,and GNP all increase by the same amount. 
B)  Canadian investment increases,but GDP and GNP are unaffected by the purchase. 
C)  Canadian investment and GDP increase by the same amount,but Canadian GNP increases by a smaller amount. 
D)  Canadian investment and GNP increase by the same amount,but Canadian GDP increases by a smaller amount.

Question 19

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

Accepted Answer

A)  $154 
B)  $169 
C)  $170 
D)  $178 
A)  $154 
B)  $169 
C)  $170 
D)  $178

Question 20

If the government reports that "GDP has increased at an annual rate of 6.0 percent for the fourth quarter of 2015," by how much has GDP increased?

Accepted Answer

A)  6.0 percent during 2015 
B)  24.0 percent during 2015 
C)  6.0 percent during the fourth quarter of 2015 
D)  1.5 percent during the fourth quarter of 2015 
A)  6.0 percent during 2015 
B)  24.0 percent during 2015 
C)  6.0 percent during the fourth quarter of 2015 
D)  1.5 percent during the fourth quarter of 2015

When economists talk about growth in the economy,how do they measure that growth?

The basic tools of supply and demand analysis are as central to macroeconomic analysis as they are to microeconomic analysis.

Which of the following best defines national income?

How is Canadian GNP calculated from Canadian GDP?

In Canada in 2014,what percentage of GDP was consumption?

Which of the following is counted in Canadian GDP?

Which example would be included in Canadian consumption?

Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments).What is included in GDP?

Table 5-4 Use the following table to answer the following questions. -Refer to the Table 5-4.What is the nominal GDP for 2014?

What does personal income include and exclude?

Which statement best represents a transfer payment?

In the nation of Ophelia,quarterly GDP is always higher in the second quarter than in other quarters.In order to account for this predictable jump in GDP,what will Ophelia's government statisticians most likely do?

How are intermediate goods accounted for when calculating GDP?

How are nominal GDP and real GDP related?

Table 5-2 -Refer to the Table 5-2.What is the NNP for this economy?

In a given year,an economy has consumption of $6000,investment of $4000,government purchases of $3500,exports of $1500,imports of $1600,taxes of $1200,transfer payments of $1400,and depreciation of $1300.What is the GDP?

A wind farm in Manitoba buys a large turbine generator from a Swedish-owned factory located in Ontario and using local workers.What happens as a result?

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

If the government reports that "GDP has increased at an annual rate of 6.0 percent for the fourth quarter of 2015," by how much has GDP increased?

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

When economists talk about growth in the economy,how do they measure that growth?

The basic tools of supply and demand analysis are as central to macroeconomic analysis as they are to microeconomic analysis.

Which of the following best defines national income?

How is Canadian GNP calculated from Canadian GDP?

In Canada in 2014,what percentage of GDP was consumption?

Which of the following is counted in Canadian GDP?

Which example would be included in Canadian consumption?

Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments).What is included in GDP?

Table 5-4 Use the following table to answer the following questions. -Refer to the Table 5-4.What is the nominal GDP for 2014?

What does personal income include and exclude?

Which statement best represents a transfer payment?

In the nation of Ophelia,quarterly GDP is always higher in the second quarter than in other quarters.In order to account for this predictable jump in GDP,what will Ophelia's government statisticians most likely do?

How are intermediate goods accounted for when calculating GDP?

How are nominal GDP and real GDP related?

Table 5-2 -Refer to the Table 5-2.What is the NNP for this economy?

In a given year,an economy has consumption of $6000,investment of $4000,government purchases of $3500,exports of $1500,imports of $1600,taxes of $1200,transfer payments of $1400,and depreciation of $1300.What is the GDP?

A wind farm in Manitoba buys a large turbine generator from a Swedish-owned factory located in Ontario and using local workers.What happens as a result?

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

If the government reports that "GDP has increased at an annual rate of 6.0 percent for the fourth quarter of 2015," by how much has GDP increased?

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