Question 1

What best defines the GDP deflator?

Accepted Answer

A)  the ratio of real GDP to nominal GDP 
B)  the ratio of real GDP to nominal GDP multiplied by 100 
C)  the ratio of nominal GDP to real GDP 
D)  the ratio of nominal GDP to real GDP multiplied by 100 
A)  the ratio of real GDP to nominal GDP 
B)  the ratio of real GDP to nominal GDP multiplied by 100 
C)  the ratio of nominal GDP to real GDP 
D)  the ratio of nominal GDP to real GDP multiplied by 100

Question 2

What is included in GDP?

Accepted Answer

A)  the sale of stocks and bonds 
B)  the sale of used goods 
C)  the sale of services such as visits to a doctor 
D)  the sale of ownership in a new company 
A)  the sale of stocks and bonds 
B)  the sale of used goods 
C)  the sale of services such as visits to a doctor 
D)  the sale of ownership in a new company

Question 3

What government level(s)will be 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 only 
A)  the federal government only 
B)  provincial and federal governments only 
C)  local,provincial,and federal governments 
D)  local and provincial governments only

Question 4

To encourage formation of small businesses,the government could provide subsidies.How would these subsidies be treated?

Accepted Answer

A)  They would be included in GDP because they are part of government expenditures. 
B)  They would be included in GDP because they are part of investment expenditures. 
C)  They would not be included in GDP because they are transfer payments. 
D)  They would not be included in GDP because the government raises taxes to pay for them. 
A)  They would be included in GDP because they are part of government expenditures. 
B)  They would be included in GDP because they are part of investment expenditures. 
C)  They would not be included in GDP because they are transfer payments. 
D)  They would not be included in GDP because the government raises taxes to pay for them.

Question 5

Dave knits ski caps with tassels at a negligible cost.He sells 4 percent more caps this year than last year.The market price this year is 1 percent lower than last year.Which inflation rate makes Dave as well off this year as last year?

Accepted Answer

A)  1 percent 
B)  2 percent 
C)  3 percent 
D)  4 percent 
A)  1 percent 
B)  2 percent 
C)  3 percent 
D)  4 percent

Question 6

Which headline would be most closely related to what macroeconomists study?

Accepted Answer

A)  The inflation rate rises from 5 percent to 5.5 percent. 
B)  The price of gold grows by 3.1 percent in the third quarter. 
C)  The number of tourists visiting Canadian national parks has declined. 
D)  The price of oranges rises after an early frost. 
A)  The inflation rate rises from 5 percent to 5.5 percent. 
B)  The price of gold grows by 3.1 percent in the third quarter. 
C)  The number of tourists visiting Canadian national parks has declined. 
D)  The price of oranges rises after an early frost.

Question 7

Why is GDP computed using market prices as the value of final goods and services?

Accepted Answer

A)  because market prices do not change much,so it is easy to make comparisons between years 
B)  because if market prices are out of line with how people value goods,the government sets ceilings and floors on them 
C)  because costs change too much to reflect the value of goods and services 
D)  because market prices reflect the value of goods and services 
A)  because market prices do not change much,so it is easy to make comparisons between years 
B)  because if market prices are out of line with how people value goods,the government sets ceilings and floors on them 
C)  because costs change too much to reflect the value of goods and services 
D)  because market prices reflect the value of goods and services

Question 8

If the Canadian government pays a retired economist at the Ministry of Finance $80,000 in retirement benefits in 2015,how is the payment treated?

Accepted Answer

A)  It is included in 2015 GDP as government purchases. 
B)  It is not included in 2015 GDP because it is a transfer payment. 
C)  It is included in 2015 GDP as transfer payments. 
D)  It is not included in 2015 GDP because it is part of government purchases. 
A)  It is included in 2015 GDP as government purchases. 
B)  It is not included in 2015 GDP because it is a transfer payment. 
C)  It is included in 2015 GDP as transfer payments. 
D)  It is not included in 2015 GDP because it is part of government purchases.

Question 9

Suppose that 25 years ago a country had nominal GDP of 1000,a GDP deflator of 200,and a population of 100.Today,that country has a nominal GDP of 3000,a deflator of 400,and a population of 150.What happened to the real GDP per person?

Accepted Answer

A)  It more than doubled. 
B)  It rose,but less than doubled. 
C)  It fell. 
D)  It did not change. 
A)  It more than doubled. 
B)  It rose,but less than doubled. 
C)  It fell. 
D)  It did not change.

What best defines the GDP deflator?

What is included in GDP?

What government level(s)will be considered when computing government purchases for GDP accounting purposes?

To encourage formation of small businesses,the government could provide subsidies.How would these subsidies be treated?

Dave knits ski caps with tassels at a negligible cost.He sells 4 percent more caps this year than last year.The market price this year is 1 percent lower than last year.Which inflation rate makes Dave as well off this year as last year?

Which headline would be most closely related to what macroeconomists study?

Why is GDP computed using market prices as the value of final goods and services?

If the Canadian government pays a retired economist at the Ministry of Finance $80,000 in retirement benefits in 2015,how is the payment treated?

Suppose that 25 years ago a country had nominal GDP of 1000,a GDP deflator of 200,and a population of 100.Today,that country has a nominal GDP of 3000,a deflator of 400,and a population of 150.What happened to the real GDP per person?

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

What best defines the GDP deflator?

What is included in GDP?

What government level(s)will be considered when computing government purchases for GDP accounting purposes?

To encourage formation of small businesses,the government could provide subsidies.How would these subsidies be treated?

Dave knits ski caps with tassels at a negligible cost.He sells 4 percent more caps this year than last year.The market price this year is 1 percent lower than last year.Which inflation rate makes Dave as well off this year as last year?

Which headline would be most closely related to what macroeconomists study?

Why is GDP computed using market prices as the value of final goods and services?

If the Canadian government pays a retired economist at the Ministry of Finance $80,000 in retirement benefits in 2015,how is the payment treated?

Suppose that 25 years ago a country had nominal GDP of 1000,a GDP deflator of 200,and a population of 100.Today,that country has a nominal GDP of 3000,a deflator of 400,and a population of 150.What happened to the real GDP per person?

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