Question 1

If nominal GDP increased by 5 percent and the GDP deflator increased by 3 percent,then real GDP ______ by ______ percent.

Accepted Answer

A)  increased ; 2 
B)  decreased; 2 
C)  increased; 8 
D)  decreased; 8

Question 2

Assume that apples cost $0.50 in 2002 and $1 in 2009,whereas oranges cost $1 in 2002 and $1.50 in 2009.If 4 apples were produced in 2002 and 5 in 2009,whereas 3 oranges were produced in 2002 and 4 in 2009,then real GDP (in 2002 prices)in 2009 was:

Accepted Answer

A)  $5. 
B)  $6.50. 
C)  $9.50. 
D)  $11.

Question 3

If the number employed increases while the number unemployed does not change,the unemployment rate:

Accepted Answer

A)  will increase. 
B)  will decrease. 
C)  will not change. 
D)  may either increase or decrease.

Question 4

The CPI is determined by computing:

Accepted Answer

A)  an average of prices of all goods and services. 
B)  the price of a basket of goods and services that changes every year,relative to the same basket in a base year. 
C)  the price of a fixed basket of goods and services,relative to the price of the same basket in a base year. 
D)  nominal GDP relative to real GDP.

Question 5

The version of Okun's law studied in Chapter 2 assumes that with no change in unemployment,real GDP normally grows by about 4 percent over a year.If the unemployment rate rose by 1 percent over a time period too brief for normal growth to occur,Okun's law would predict the corresponding change in real GDP to be a:

Accepted Answer

A)  rise of about 0.5 percent. 
B)  rise of about 2 percent. 
C)  fall of about 2 percent. 
D)  fall of about 0.5 percent.

Question 6

Assume that the market basket of goods and services purchased in 2004 by the average family in Canada costs $14,000 in 2004 prices,whereas the same basket costs $21,000 in 2009 prices.However,the basket of goods and services actually purchased by the average family in 2009 costs $20,000 in 2009 prices,whereas this same basket would have cost $15,000 in 2004 prices.Given this data,a Laspeyres index of 2009 prices would be:

Accepted Answer

A)  1.05. 
B)  approximately 1.07. 
C)  approximately 1.33. 
D)  1.50.

Question 7

The statistic used by economists to measure the value of economic output is the:

Accepted Answer

A)  CPI. 
B)  GDP. 
C)  GDP deflator. 
D)  unemployment rate.

Question 8

If nominal GDP in 2009 equals $1.4 trillion and real GDP in 2009 equals $1.1 trillion,what is the value of the GDP deflator?

Accepted Answer

A)  0.79 
B)  1.03 
C)  1.27 
D)  1.30

Question 9

All of the following are a flow except:

Accepted Answer

A)  the number of new automobile purchases. 
B)  the number of people losing their jobs. 
C)  business expenditures on plant and equipment. 
D)  the government debt.

Question 10

Real GDP is measured in _____ dollars ____ time.

Accepted Answer

A)  current; at a point in 
B)  current; over a period of 
C)  constant; at a point in 
D)  constant; over a period of

Question 11

In 2012,Canadian spent about _____ percent of per-capita GDP on imports.

Accepted Answer

A)  14 
B)  24 
C)  32 
D)  44

Question 12

According to the definition used by Statistics Canada,a person is not in the labour force if that person:

Accepted Answer

A)  is going to school. 
B)  is temporarily absent from a job because of illness. 
C)  has been temporarily laid off. 
D)  is out of a job and looking for work during the previous four weeks.

Question 13

Disposable personal income:

Accepted Answer

A)  is computed by subtracting personal tax and nontax payments from personal income. 
B)  is generally greater than personal income. 
C)  includes corporate profits but not dividends. 
D)  does not include government transfers to individuals.

Question 14

If an increasing proportion of the adult population is retired,then the labour force participation rate:

Accepted Answer

A)  will increase. 
B)  will decrease. 
C)  will remain constant. 
D)  may increase,decrease,or remain constant.

Question 15

The economic statistic used to measure the level of prices is the:

Accepted Answer

A)  GDP. 
B)  CPI. 
C)  GNP. 
D)  real GDP.

Question 16

All of the following transactions that took place in 2014 would be included in GDP for 2014 except the purchase of a:

Accepted Answer

A)  book printed in 2014,entitled The Year 3000. 
B)  2001 Jeep Cherokee. 
C)  year 2015 calendar printed in 2014. 
D)  ticket to see the movie 2001.

Exam 2: The Data of Macroeconomics

If nominal GDP increased by 5 percent and the GDP deflator increased by 3 percent,then real GDP by percent.

Assume that apples cost $0.50 in 2002 and $1 in 2009,whereas oranges cost $1 in 2002 and $1.50 in 2009.If 4 apples were produced in 2002 and 5 in 2009,whereas 3 oranges were produced in 2002 and 4 in 2009,then real GDP (in 2002 prices) in 2009 was: