Question 1

Refer to the above information.Negative net investment is occurring in:

Accepted Answer

A)  economy A only.
B)  economy B only.
C)  economy C only.
D)  economies A and B only.E) C) and D)
F) None of the above

Question 2

In 1933 net investment was minus $208 million.This meant that:

Accepted Answer

A)  gross investment exceeded depreciation by $208 million.
B)  the economy was expanding in that year.
C)  the production of 1933's GDP used up more capital goods than were produced in that year.
D)  the economy produced no capital goods at all in 1933.E) A) and D)
F) B) and C)

Question 3

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.The nominal GDP for year 3 is:

Accepted Answer

A)  125 percent higher than the nominal GDP for year 1.
B)  50 percent higher than the nominal GDP for year 1.
C)  120
D)  30E) A) and B)
F) A) and C)

Question 4

If nominal GDP in some year is $280 and real GDP is $160 the GDP price index for that year is:

Accepted Answer

A)  175
B)  57
C)  160
D)  280E) A) and D)
F) A) and C)

Question 5

If depreciation exceeds gross investment:

Accepted Answer

A)  the economy's stock of capital may be either growing or shrinking.
B)  the economy's stock of capital is shrinking.
C)  the economy's stock of capital is growing.
D)  net investment is zero.E) B) and D)
F) A) and C)

Question 6

Refer to the data below.Personal income: All figures are in billions of dollars.

Accepted Answer

A)  is $229.
B)  is $253.
C)  is $274.
D)  is $243.E) B) and C)
F) A) and C)

Question 7

National income accountants can avoid multiple counting by:

Accepted Answer

A)  including transfers in their calculations.
B)  counting both intermediate and final goods.
C)  only counting final goods.
D)  only counting intermediate goods.E) A) and C)
F) None of the above

Question 8

If all the final goods and intermediate goods and services were included in GDP:

Accepted Answer

A)  the GDP would then have to be deflated for changes in the price level.
B)  nominal GDP would exceed real GDP.
C)  the GDP would be overstated.
D)  the GDP would be understated.E) A) and B)
F) C) and D)

Question 9

A price index is 100 times the ratio of real GDP to nominal GDP.

Accepted Answer

A) True 
 B)False

Question 10

Based on Canada's 2017 GDP calculation (using the expenditure approach) , what areas contributed the most toward Canada's GDP (calculation based on the expenditure approach)  in 2017?

Accepted Answer

A)  Personal consumption expenditure
B)  Gross investment expenditure
C)  Government purchases of goods and services
D)  Net exportsE) B) and D)
F) B) and C)

Question 11

(GDP figures are in billions of dollars.)   ]
Refer to the above table.What is the GDP price index in Year 1?

Accepted Answer

A)  105.2
B)  108.3
C)  109.6
D)  111.5E) All of the above
F) A) and B)

Question 12

In 2001, in calculation of the implicit price index, Statistics Canada switched from fixed based price index method to a chain-weighted index.The main reason for this was:

Accepted Answer

A)  to avoid complex calculation of the fixed based price index.
B)  to better represent the weight of each category especially the information technology sector.
C)  to avoid underestimation of the GDP growth, due to the rapid growth in the information technology sector.
D)  to be able to use the relatively constant weights for the items in the GDP year after year.E) A) and C)
F) All of the above

Question 13

In an economy, the value of inventories fell from $75 billion in 2012 to $63 billion in 2013.In calculating the total investment for 2013, national income accountants would:

Accepted Answer

A)  decrease it by $75 billion.
B)  increase it by $63 billion.
C)  decrease it by $12 billion.
D)  increase it by $138 billion.E) B) and C)
F) None of the above

Question 14

Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5.The current year per unit prices of these three goods are A = $2, B = $3, and C = $1.Refer to the above information.Nominal GDP in the current year is:

Accepted Answer

A)  $110
B)  $115
C)  $45
D)  $90E) None of the above
F) All of the above

Question 15

Which is included in GDP?

Accepted Answer

A)  used autos purchased by consumers
B)  transfer payments
C)  telephone service for a home
D)  bread for a restaurantE) B) and C)
F) All of the above

Question 16

GDP tends to overstate economic well-being because it takes into account:

Accepted Answer

A)  improvements in product quality over time.
B)  expenditures undertaken to correct pollution.
C)  illegal activities of individuals and businesses.
D)  nonmarket activities, such as the productive work of homemakers.E) B) and C)
F) All of the above

Question 17

The table below indicates the price and output data over a five-year period for an economy that produces only one good.  Refer to the above data.If year 2 is the base year, real GDP in year 5 is:

Accepted Answer

A)  $120
B)  $90
C)  $60
D)  $30E) A) and D)
F) C) and D)

Question 18

Which of the following is the first step for deriving real GDP from nominal GDP?

Accepted Answer

A)  Finding nominal GDP for each year
B)  Finding real GDP for each year
C)  Computing a price index
D)  Dividing each year's nominal GDP by the price year's price indexE) None of the above
F) A) and B)

Question 19

The smallest component of aggregate spending in Canada is:

Accepted Answer

A)  net exports.
B)  government purchases.
C)  investment.
D)  consumption.E) B) and C)
F) A) and B)

Question 20

Net exports are a negative number when:

Accepted Answer

A)  a nation's imports of goods and services fall.
B)  a nation's imports of goods and services rise.
C)  a nation's exports of goods and services are greater than its imports.
D)  a nation's imports of goods and services are greater than its exports.E) A) and D)
F) B) and C)

Exam 7: B: Measuring the Economys Output

The smallest component of aggregate spending in Canada is:

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If nominal GDP in some year is $280 and real GDP is $160 the GDP price index for that year is:

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In an economy, the value of inventories fell from $75 billion in 2012 to $63 billion in 2013.In calculating the total investment for 2013, national income accountants would:

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Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5.The current year per unit prices of these three goods are A = $2, B = $3, and C = $1.Refer to the above information.Nominal GDP in the current year is:

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GDP tends to overstate economic well-being because it takes into account:

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Based on Canada's 2017 GDP calculation (using the expenditure approach) , what areas contributed the most toward Canada's GDP (calculation based on the expenditure approach) in 2017?

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Which of the following is the first step for deriving real GDP from nominal GDP?

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Refer to the data below.Personal income: All figures are in billions of dollars.

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Net exports are a negative number when:

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The table below indicates the price and output data over a five-year period for an economy that produces only one good. Refer to the above data.If year 2 is the base year, real GDP in year 5 is:

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A price index is 100 times the ratio of real GDP to nominal GDP.

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National income accountants can avoid multiple counting by:

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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.The nominal GDP for year 3 is:

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In 2001, in calculation of the implicit price index, Statistics Canada switched from fixed based price index method to a chain-weighted index.The main reason for this was:

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Refer to the above information.Negative net investment is occurring in:

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Which is included in GDP?

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In 1933 net investment was minus $208 million.This meant that:

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(GDP figures are in billions of dollars.) ] Refer to the above table.What is the GDP price index in Year 1?

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If depreciation exceeds gross investment:

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If all the final goods and intermediate goods and services were included in GDP:

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