Question 1

Use the following to answer questions: 
-(Figure 7-1: Circular-Flow Model)Use Figure 7-1: Circular-Flow Model.If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it)and there is an increase in investment spending,holding everything else constant,which outcome is likely to occur?

Accepted Answer

A)   a decrease in GDP
B)   an increase in GDP
C)   an increase in the unemployment rate
D)   a decrease in the inflation rate B

Question 2

Suppose that,in year 1,an economy produces 100 golf balls that sell for $3 each and 75 pizzas that sell for $8 each.The next year,the economy produces 110 golf balls that sell for $3.25 each and 80 pizzas that sell for $9 each.The growth rate of nominal GDP from year 1 to year 2 is _____%.

Accepted Answer

A)   10
B)   7.8
C)   19.7
D)   8.8 C

Question 3

An example of a government transfer is a(n):

Accepted Answer

A)   expenditure on a provincial highway.
B)   bequest from a deceased relative.
C)   employment insurance payment.
D)   salary for a member of the armed forces. C

Question 4

Use the following to answer questions: 
-(Table: Per Capita GDP)Use Table: Per Capita GDP.If 2011 is the base year,real GDP in 2011 was:

Accepted Answer

A)   $500.
B)   $3 000.
C)   $4 000.
D)   $300 000.

Question 5

Use the following to answer questions: 
-(Table: Price Index)Use Table: Price Index.Which year is MOST likely to be the base year?

Accepted Answer

A)   2009
B)   2011
C)   2010
D)   2008

Question 6

Suppose that,in year 1,an economy produces 100 golf balls that sell for $3 each and 75 pizzas that sell for $8 each.The next year,the economy produces 110 golf balls that sell for $3.25 each and 80 pizzas that sell for $9 each.Using year 1 as the base year,the growth rate of real GDP from year 1 to year 2 is _____%.

Accepted Answer

A)   10
B)   7.8
C)   19.7
D)   8.8

Question 7

In the product markets:

Accepted Answer

A)   households supply goods and services.
B)   households supply resources.
C)   firms demand goods and services.
D)   firms supply goods and services.

Question 8

GDP is the:

Accepted Answer

A)   total market value of all final goods and services produced in an economy in 1 year.
B)   total accumulated wealth of an economy.
C)   volume of all dollar transactions made in an economy in 1 year.
D)   dollar amount of all sales made in the economy in 1 year.

Question 9

Use the following to answer questions: 
-(Figure 7-1: Circular-Flow Model)Use Figure 7-1: Circular-Flow Model.If the circular-flow model is in equilibrium (the sum of money flowing into each box is equal to the sum of the money flowing out of it)and there is a decrease in government spending,holding everything else constant,which outcome is likely to occur?

Accepted Answer

A)   an increase in the nominal GDP
B)   an increase in the real GDP
C)   an increase in the unemployment rate
D)   an increase in the inflation rate

Question 10

Which transaction is included in the nation's gross domestic product?

Accepted Answer

A)   A university student buys a used textbook from his roommate.
B)   A construction company purchases lumber to build a new house.
C)   A university student buys a pizza and has it delivered to her dorm room.
D)   A group of university students volunteer to rake leaves at an assisted living facility for senior citizens.

Question 11

The scale MOST often used to compare economic performance in other years is:

Accepted Answer

A)   the circular-flow diagram.
B)   real GDP.
C)   the business cycle.
D)   fiscal policy.

Question 12

Use the following to answer questions: 
-(Table: Price Index)What is the inflation rate between 2010 and 2011?

Accepted Answer

A)   6.8%
B)   4%
C)   7%
D)   6%

Question 13

Use the following to answer questions: 
-(Table: Peanut Butter and Jelly Economy)Use Table: Peanut Butter and Jelly Economy.Between 2010 and 2011,nominal GDP _____ by _____%.

Accepted Answer

A)   increased;12.5
B)   decreased;12.5
C)   increased;16.67
D)   increased;31.25

Question 14

If we add up the consumer spending on goods and services,investment spending,government purchases of goods and services,and the value of exports,then subtract the value of imports,we have measured the nation's:

Accepted Answer

A)   disposable income.
B)   gross domestic product.
C)   trade deficit.
D)   budget deficit.

Question 15

Chained dollars is:

Accepted Answer

A)   money that banks are required to keep in their vaults to back deposits.
B)   the measure of the value of intermediate goods.
C)   a method for calculating changes in real GDP using an early base year and a late base year.
D)   a method used to convert real to nominal GDP.

Question 16

Use the following to answer questions: 
-(Figure 7-1: Circular-Flow Model)Use Figure 7-1: Circular-Flow Model.What is the value of GDP in this economy?

Accepted Answer

A)   $100
B)   $400
C)   $500
D)   $600

Question 17

In the circular-flow diagram,an organization that produces goods and services for sale is a:

Accepted Answer

A)   government.
B)   factor.
C)   household.
D)   firm.

Question 18

Which transaction is included in a current year's GDP as investment spending?

Accepted Answer

A)   ABC company purchased 10 000 shares of Bombardier stock.
B)   Ronnie bought a new BMW.
C)   Anton purchased his friend's condo.
D)   Maggie bought a play-gym set for her day-care business.

Question 19

Which transaction would NOT be counted in GDP?

Accepted Answer

A)   Nike builds a retail store.
B)   Your mother buys a kilogram of Quebec-grown apples.
C)   Your mother buys 100 shares of Nike stock.
D)   The Ontario provincial government pays for repair of a damaged bridge over the Niagara River.

Question 20

Use the following to answer questions: 
-(Figure 7-2: Expanded Circular-Flow Model)Use Figure 7-2: Expanded Circular-Flow Model.What is GDP?

Accepted Answer

A)   $200
B)   $700
C)   $1 000
D)   $1 080

Exam 7: Gdp and the Cpi: Tracking the Macroeconomy

Suppose that,in year 1,an economy produces 100 golf balls that sell for $3 each and 75 pizzas that sell for $8 each.The next year,the economy produces 110 golf balls that sell for $3.25 each and 80 pizzas that sell for $9 each.The growth rate of nominal GDP from year 1 to year 2 is _____%.

An example of a government transfer is a(n) :

Use the following to answer questions: -(Table: Per Capita GDP) Use Table: Per Capita GDP.If 2011 is the base year,real GDP in 2011 was:

Use the following to answer questions: -(Table: Price Index) Use Table: Price Index.Which year is MOST likely to be the base year?

In the product markets:

GDP is the:

Which transaction is included in the nation's gross domestic product?

The scale MOST often used to compare economic performance in other years is:

Use the following to answer questions: -(Table: Price Index) What is the inflation rate between 2010 and 2011?

Use the following to answer questions: -(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy.Between 2010 and 2011,nominal GDP _ by _%.

If we add up the consumer spending on goods and services,investment spending,government purchases of goods and services,and the value of exports,then subtract the value of imports,we have measured the nation's:

Chained dollars is:

Use the following to answer questions: -(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model.What is the value of GDP in this economy?

In the circular-flow diagram,an organization that produces goods and services for sale is a:

Which transaction is included in a current year's GDP as investment spending?

Which transaction would NOT be counted in GDP?

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model.What is GDP?

Exam 7: Gdp and the Cpi: Tracking the Macroeconomy

Suppose that,in year 1,an economy produces 100 golf balls that sell for $3 each and 75 pizzas that sell for $8 each.The next year,the economy produces 110 golf balls that sell for $3.25 each and 80 pizzas that sell for $9 each.The growth rate of nominal GDP from year 1 to year 2 is _____%.

An example of a government transfer is a(n) :

Use the following to answer questions: -(Table: Per Capita GDP) Use Table: Per Capita GDP.If 2011 is the base year,real GDP in 2011 was:

Use the following to answer questions: -(Table: Price Index) Use Table: Price Index.Which year is MOST likely to be the base year?

In the product markets:

GDP is the:

Which transaction is included in the nation's gross domestic product?

The scale MOST often used to compare economic performance in other years is:

Use the following to answer questions: -(Table: Price Index) What is the inflation rate between 2010 and 2011?

Use the following to answer questions: -(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy.Between 2010 and 2011,nominal GDP _____ by _____%.

If we add up the consumer spending on goods and services,investment spending,government purchases of goods and services,and the value of exports,then subtract the value of imports,we have measured the nation's:

Chained dollars is:

Use the following to answer questions: -(Figure 7-1: Circular-Flow Model) Use Figure 7-1: Circular-Flow Model.What is the value of GDP in this economy?

In the circular-flow diagram,an organization that produces goods and services for sale is a:

Which transaction is included in a current year's GDP as investment spending?

Which transaction would NOT be counted in GDP?

Use the following to answer questions: -(Figure 7-2: Expanded Circular-Flow Model) Use Figure 7-2: Expanded Circular-Flow Model.What is GDP?

Use the following to answer questions: -(Table: Peanut Butter and Jelly Economy) Use Table: Peanut Butter and Jelly Economy.Between 2010 and 2011,nominal GDP _ by _%.