Question 1

Consumption spending is $4.5 billion, investment is $3 billion, and government expenditures are $2 billion.If GDP is $14 billion, which of the following could be true regarding exports and imports in the economy?

Accepted Answer

A) Exports are $4.5 billion and imports are $2 billion. 
B) Exports are $6 billion and imports are $8.5 billion. 
C) Exports are $9 billion and imports are $6 billion. 
D) Exports are $15 billion and imports are $10.5 billion. 
E) Exports are $17 billion and imports are $6 billion.

Question 2

Macroeconomics, as opposed to microeconomics, includes the study of what determines the

Accepted Answer

A) average price levels of goods and services in the economy. 
B) price charged for laptop computers by Dell. 
C) wages paid to employees by Dell. 
D) quantity of Dell employees. 
E) the prices of substitutes for computers.

Question 3

Table 4.11  Consider the above data for Tyrovia, a country that produces only two products: guns and butter.
-Refer to Table 4.11.Nominal GDP for Tyrovia in 2018 equals

Accepted Answer

A) $1,140. 
B) $880. 
C) $690. 
D) $560. 
E) $320.

Question 4

Table 4.29 
-Refer to Table 4.29.Based on the table above, what is the net national income for this economy?

Accepted Answer

A) $800 billion 
B) $1,100 billion 
C) $1,500 billion 
D) $1,700 billion 
E) $1,900 billion

Question 5

A transfer payment is a payment by the government to an individual

Accepted Answer

A) for a service. 
B) for an investment good. 
C) for a consumption good. 
D) for which the government does not receive a good or service in return. 
E) for a debt owed.

Question 6

If real GDP increases, we know for sure that

Accepted Answer

A) output has risen. 
B) prices have risen. 
C) prices have risen but output has remained constant. 
D) prices have remained constant. 
E) output has fallen.

Question 7

The informal sector can be a significant drag on the economies of developing countries because the firms in the informal sector

Accepted Answer

A) produce goods and services no one wants. 
B) sell their goods and services to citizens in other countries. 
C) do not pay taxes to the government. 
D) employ illegal immigrants from other countries. 
E) are better able to produce goods and services in high demand.

Question 8

Since real GDP is adjusted for inflation and nominal GDP is not, nominal GDP must always be higher than real GDP.Do you agree or disagree? Why?

Accepted Answer

The answer of Since real GDP is adjusted for inflation...

Question 9

Over the last 50 years, has the ratio of household production to gross domestic product in Canada increased or decreased? Consider the effect of the increased number of women working outside the home, and the effect of advances in technology in household production such as microwaves, coffee makers, power tools, etc.

Accepted Answer

The answer of Over the last 50 years, has the...

Question 10

In the circular flow model, the value of total production for an economy ________ the value of total expenditures on final goods and services.

Accepted Answer

A) equals 
B) is greater than 
C) is less than 
D) may be greater than or less than 
E) is unrelated to

Question 11

Gross national income, GNI, of Canada is the market value of

Accepted Answer

A) all the final goods and services produced within Canada. 
B) the value of the goods and services consumed within Canada. 
C) payments Canadians receive for the use of their factors of production. 
D) the value of goods and services consumed by Canadian, even if they live outside Canada. 
E) the services produced in Canada and sold abroad.

Question 12

Because workers in Canada work fewer hours per week, on average, than they did over 100 years ago,

Accepted Answer

A) workers in Canada are worse off than they were over 100 years ago. 
B) workers in Canada earn less income than they did over 100 years ago. 
C) GDP is lower than it would be if Canadian workers worked the same hours that they did over 100 years ago. 
D) GDP is higher than it would be if Canadian workers worked the same hours that they did over 100 years ago. 
E) GDP is higher due to the technological progress made by people in their time off.

Question 13

If nominal GDP rises, we can say that

Accepted Answer

A) production has risen and prices remain constant. 
B) prices have risen and production remains constant. 
C) production has risen, or prices have risen, or both have risen. 
D) production has fallen and prices have risen. 
E) prices have fallen and production has remained constant.

Question 14

An example of business fixed investment spending is

Accepted Answer

A) a purchase of a home by a household. 
B) a purchase of a computer by an accounting firm. 
C) a purchase of a bond by General Electric Corporation. 
D) $200 million of unsold cars at a car dealership. 
E) a purchase of shares in Bombardier.

Question 15

Table 4.28 
-Refer to Table 4.28.The table above represents hypothetical data from the National Income Accounts for 2018.Use the data to calculate personal income and disposable income.

Accepted Answer

The answer of Table 4.28 
-Refer to Table 4.28.The table...

Question 16

Presently, GDP is ________ to compensate for the costs of environmental damage.

Accepted Answer

A) fully adjusted 
B) partially adjusted 
C) adjusted on a chain-weight basis 
D) not adjusted 
E) adjusted using base year values of environmental quality

Question 17

Real GDP per capita is calculated by dividing the value of real GDP for a country by the country's adult population.

Accepted Answer

A) True 
 B)False

Question 18

Give two reasons why GDP does not reflect total production in an economy.

Accepted Answer

The answer of Give two reasons why GDP does not...

Question 19

One reason why consumption accounts for more of GDP in the U.S.than it does in Canada is

Accepted Answer

A) Americans are more materialistic. 
B) spending on health care is often counted as consumption in the U.S.and not in Canada. 
C) Americans are less concerned about the future than Canadians. 
D) there is less for consumers to buy in Canada. 
E) Canadian save much more than Americans.

Question 20

The circular flow of income shows that GDP can be measured as the sum of wages, interest, rent, and profits received by households or total expenditures on goods and services by households, firms, government, and the rest of the world.

Accepted Answer