Question 1

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)   300.E) B) and C)
F) A) and C)

Question 2

The purchase of Wal-Mart stock is a part of gross, but not of net, private domestic investment.

Accepted Answer

A) True 
 B)False

Question 3

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)   $30.E) All of the above
F) A) and B)

Question 4

Which of the following is the smallest in terms of dollar amount in Canada?

Accepted Answer

A)   disposable income
B)   personal income
C)   gross domestic product
D)   gross national productE) B) and D)
F) None of the above

Question 5

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) A) and B)
F) All of the above

Question 6

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)   280.E) A) and B)
F) None of the above

Question 7

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 D)
F) A) and B)

Question 8

As defined in national income accounting, investment includes:

Accepted Answer

A)   business expenditures on machinery and equipment.
B)   all consumption.
C)   imports, but not exports.
D)   all nonfood items.E) A) and B)
F) B) and D)

Question 9

Transfer payments are included in:

Accepted Answer

A)   GNP.
B)   PI.
C)   GDP.
D)   GE) C) and D)
F) B) and D)

Question 10

Environmental pollution is accounted for in:

Accepted Answer

A)   GDP.
B)   DI.
C)   PI.
D)   None of the above.E) A) and B)
F) A) and C)

Question 11

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 C)
F) None of the above

Question 12

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

Accepted Answer

A)   $184.
B)   $221.
C)   $202.
D)   $228.E) C) and D)
F) B) and C)

Question 13

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

Accepted Answer

A)   all of the illegal activities conducted by organized crime in the economy.
B)   spending on intermediate goods that are used to produce final goods.
C)   health care costs related to the consumption of products with adverse health effects.
D)   the personal labour time that car owners spend working on car repairs and maintenance of their vehicles.E) A) and C)
F) A) and B)

Question 14

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

Accepted Answer

A) True 
 B)False

Question 15

The term "final goods and services" refers to:

Accepted Answer

A)   goods and services which are unsold and therefore added to inventories.
B)   goods and services whose value has been adjusted for changes in the price level.
C)   goods and services purchased by ultimate users, as opposed to resale or further processing.
D)   the excess of Canadians exports over Canadians imports.E) All of the above
F) None of the above

Question 16

-For the above economy, the real GDP in year 3 is:

Accepted Answer

A)   $520.
B)   $485.
C)   $576.
D)   $480.E) B) and C)
F) All of the above

Question 17

Disposable income differs from personal income by:

Accepted Answer

A)   personal taxes.
B)   personal saving.
C)   transfer payments.
D)   personal consumption expenditures.E) C) and D)
F) B) and C)

Question 18

GDP by the expenditure approach is equal to:

Accepted Answer

A)   C + Ig + G + Xn.
B)   C + Ig + G - Xn.
C)   C + In + G + Xn.
D)   C + In + G - Xn.E) A) and C)
F) B) and C)

Question 19

In an economy, the value of inventories fell from $75 billion in 2012 to $63 billion in 2013. In calculating 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) All of the above
F) A) and C)

Question 20

Suppose a nation's 2008 nominal GDP was $972 billion and the general price index was 90. In order to make the 2008 GDP comparable with the base year GDP, the 2008 GDP must be:

Accepted Answer

A)   adjusted downward to $678 billion.
B)   deflated to $896 billion.
C)   inflated to $1080 billion.
D)   deflated to $1080 billion.E) B) and D)
F) B) and C)

Exam 5: Measuring the Economys Output

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:

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As defined in national income accounting, investment includes:

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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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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 total investment for 2013, national income accountants would:

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The term "final goods and services" refers to:

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Suppose a nation's 2008 nominal GDP was $972 billion and the general price index was 90. In order to make the 2008 GDP comparable with the base year GDP, the 2008 GDP must be:

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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:

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Disposable income differs from personal income by:

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Net exports are a negative number when:

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The purchase of Wal-Mart stock is a part of gross, but not of net, private domestic investment.

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

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-For the above economy, the real GDP in year 3 is:

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

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GDP by the expenditure approach is equal to:

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Transfer payments are included in:

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

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Environmental pollution is accounted for in:

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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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Which of the following is the smallest in terms of dollar amount in Canada?

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