Question 1

A nation's gross domestic product (GDP)  by the expenditure approach:

Accepted Answer

A)  can be found by summing C + Ig+ G + Xn.
B)  is the dollar value of the total output produced by its citizens, regardless of where they are living.
C)  can be found by summing C + S + G + Xn.
D)  is always some amount less than its NDI.E) C) and D)
F) B) and D)

Question 2

Refer to the data below and using year 1 as the base year, the real GDP in year 4 was approximately:

Accepted Answer

A)  $3,989 billion.
B)  $3,562 billion.
C)  $3,774 billion.
D)  $3,494 billion.E) A) and C)
F) C) and D)

Question 3

Setup Corporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete.It sells 10,000 cubic yards of concrete at $30 a cubic yard.The value added by Setup Corporation is:

Accepted Answer

A)  $200,000
B)  $100,000
C)  $300,000
D)  zero dollars.E) A) and B)
F) All of the above A

Question 4

Which of the following is not an economic investment?

Accepted Answer

A)  the purchase of a drill press by the Ajax Manufacturing Company
B)  the purchase of 100 shares of Bell Canada by a retired business executive
C)  construction of a suburban housing project
D)  the piling up of inventories on a grocer's shelfE) A) and B)
F) A) and C)

Question 5

Gross domestic product (GDP)  measures and reports output:

Accepted Answer

A)  as an index number.
B)  in percentage terms.
C)  in dollar amounts.
D)  in quantities of physical units (for example, kilos, litres, and bushels) .E) A) and B)
F) A) and C)

Question 6

In calculating GDP by the expenditure approach, we sum up:

Accepted Answer

A)  consumption, investment, government purchases, exports, and imports.
B)  investment, government purchases, consumption, and net exports.
C)  consumption, investment, wages, and rents.
D)  consumption, investment, government purchases, and imports.E) None of the above
F) All of the above

Question 7

The before-tax income received by resource suppliers is measured by disposable income.

Accepted Answer

A) True 
 B)False  False

Question 8

Consider the following data for a hypothetical economy:  The economy's real GDP has declined between years:

Accepted Answer

A)  1 and 2.
B)  2 and 3.
C)  3 and 4.
D)  4 and 5.E) A) and B)
F) A) and C)

Question 9

Assume an economy which is producing only one product.Output and price data for a three-year period are as follows.  Refer to the above data.If year 2 is chosen for the base year, in year 3 nominal GDP and real GDP, respectively, are:

Accepted Answer

A)  $180 and $30.
B)  $30 and $5.
C)  $180 and $120.
D)  $120 and $100.E) C) and D)
F) B) and D)

Question 10

Refer to the information below.The gross domestic product is: All figures are in billions of dollars.

Accepted Answer

A)  $326
B)  $282
C)  $309
D)  $300E) None of the above
F) A) and B)

Question 11

A nation's stock of capital goods will decline when:

Accepted Answer

A)  gross investment exceeds net investment.
B)  net investment is positive, but less than gross investment.
C)  depreciation exceeds gross investment.
D)  gross investment exceeds depreciation.E) A) and B)
F) A) and C)

Question 12

If real GDP in a particular year is $80 billion and nominal GDP is $240 billion, the GDP price index for that year is:

Accepted Answer

A)  100
B)  200
C)  240
D)  300E) A) and D)
F) A) and C)

Question 13

The largest component of total expenditures in Canada is:

Accepted Answer

A)  net exports.
B)  government purchases.
C)  consumption.
D)  gross investment.E) B) and C)
F) All of the above

Question 14

An example of a final good in national income accounts would be new:

Accepted Answer

A)  lawn mowers purchased by Cut-rite Mowers.
B)  flowers purchased by homeowner Lenny Davis.
C)  chemicals purchased by Green Grass Lawn Care.
D)  trees purchased by Wendy Lee's Garden Center.E) A) and B)
F) B) and C)

Question 15

The Chain-weighted index links each year to the previous year through:

Accepted Answer

A)  the use of nominal GDPs in prior years.
B)  the use of both the prior year prices and current year prices.
C)  the use of real GDPs in prior years.
D)  the use of base year implicit price index.E) B) and C)
F) A) and D)

Question 16

Answer the question(s)  based on the following data, using year 1 as the base year.All dollars are in billions.  Refer to the above data.From year 1 to year 4, prices rose by:

Accepted Answer

A)  4 percent.
B)  8 percent.
C)  10 percent.
D)  12 percent.E) All of the above
F) A) and B)

Question 17

Suppose a nation's nominal GDP was $972 billion in 2017 and the general price index was 90 in 2017.To make the value of GDP in 2017 comparable with the value of GDP in the base year, the value of GDP in 2017 must be:

Accepted Answer

A)  adjusted downward to $678 billion.
B)  deflated to $896 billion.
C)  inflated to $1,080 billion.
D)  deflated to $1,080 billion.E) A) and B)
F) B) and C)

Question 18

Exports are subtracted from imports in calculating Canadian GDP because exports are not available for domestic consumption.

Accepted Answer

A) True 
 B)False

Question 19

By summing the values added at each stage in the production of some good we obtain:

Accepted Answer

A)  the price of that good.
B)  the total income generated by that good's production.
C)  the total cost (including profits)  of that product.
D)  all of these.E) A) and D)
F) A) and C)

Question 20

GDP in an economy is $4,600 billion.Consumer expenditures are $3,500 billion, government purchases are $900 billion, and gross investment is $400 billion.Net exports are:

Accepted Answer

A)  +$400 billion.
B)  -$400 billion.
C)  +$200 billion.
D)  -$200 billion.E) None of the above
F) B) and C) D

Exam 7: B: Measuring the Economys Output

A nation's gross domestic product (GDP) by the expenditure approach:

Correct AnswerverifiedShow Answer

Refer to the data below and using year 1 as the base year, the real GDP in year 4 was approximately:

Correct AnswerverifiedShow Answer

Setup Corporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete.It sells 10,000 cubic yards of concrete at $30 a cubic yard.The value added by Setup Corporation is:

Correct AnswerverifiedA

Which of the following is not an economic investment?

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Gross domestic product (GDP) measures and reports output:

Correct AnswerverifiedShow Answer

In calculating GDP by the expenditure approach, we sum up:

Correct AnswerverifiedShow Answer

The before-tax income received by resource suppliers is measured by disposable income.

Correct AnswerverifiedFalse

Consider the following data for a hypothetical economy: The economy's real GDP has declined between years:

Correct AnswerverifiedShow Answer

Assume an economy which is producing only one product.Output and price data for a three-year period are as follows. Refer to the above data.If year 2 is chosen for the base year, in year 3 nominal GDP and real GDP, respectively, are:

Correct AnswerverifiedShow Answer

Refer to the information below.The gross domestic product is: All figures are in billions of dollars.

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A nation's stock of capital goods will decline when:

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If real GDP in a particular year is $80 billion and nominal GDP is $240 billion, the GDP price index for that year is:

Correct AnswerverifiedShow Answer

The largest component of total expenditures in Canada is:

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An example of a final good in national income accounts would be new:

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The Chain-weighted index links each year to the previous year through:

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Answer the question(s) based on the following data, using year 1 as the base year.All dollars are in billions. Refer to the above data.From year 1 to year 4, prices rose by:

Correct AnswerverifiedShow Answer

Suppose a nation's nominal GDP was $972 billion in 2017 and the general price index was 90 in 2017.To make the value of GDP in 2017 comparable with the value of GDP in the base year, the value of GDP in 2017 must be:

Correct AnswerverifiedShow Answer

Exports are subtracted from imports in calculating Canadian GDP because exports are not available for domestic consumption.

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By summing the values added at each stage in the production of some good we obtain:

Correct AnswerverifiedShow Answer

GDP in an economy is $4,600 billion.Consumer expenditures are $3,500 billion, government purchases are $900 billion, and gross investment is $400 billion.Net exports are:

Correct AnswerverifiedD

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False

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D