Question 1

Gross domestic product (GDP)  is equal to personal consumption expenditures:

Accepted Answer

A)  plus gross investment, minus government spending, and plus net exports.
B)  plus gross investment, plus government spending, and minus net exports.
C)  minus gross investment, plus government spending, and plus net exports.
D)  plus gross investment, plus government spending, and plus net exports.E) B) and D)
F) A) and C)

Question 2

GDP is the total market value of:

Accepted Answer

A)  all expenditures on natural resources, labor, and capital goods in an economy in a given year.
B)  all expenditures on consumption, investment, and net exports in an economy in a given year.
C)  all intermediate goods and services produced in an economy in a given year.
D)  all final goods and services produced in an economy in a given year.E) A) and D)
F) A) and B)

Question 3

In the treatment of Canadian exports and imports, national income accountants:

Accepted Answer

A)  subtract exports, but add imports, in calculating GDP.
B)  subtract both exports and imports in calculating GDP.
C)  add both exports and imports in calculating GDP.
D)  add exports, but subtract imports, in calculating GDP.E) C) and D)
F) A) and C)

Question 4

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.If the per unit prices of the three goods each were $1 in a base year used to construct a GDP price index, then the GDP price index in the current year is:

Accepted Answer

A)  205.5.
B)  255.5.
C)  39.3.
D)  100E) A) and C)
F) A) and B)

Question 5

GDP includes:

Accepted Answer

A)  neither intermediate nor final goods.
B)  both intermediate and final goods.
C)  intermediate, but not final, goods.
D)  final, but not intermediate, goods.E) All of the above
F) A) and B)

Question 6

Assume a manufacturer of stereo speakers purchases $40 worth of components for each speaker.The completed speaker sells for $70.The value added by the manufacturer for each speaker is:

Accepted Answer

A)  $110
B)  $30
C)  $40
D)  $70E) All of the above
F) C) and D)

Question 7

By summing the dollar value of all market transactions in the economy we would:

Accepted Answer

A)  be determining the market value of all resources used in the production process.
B)  obtain a sum substantially larger than the GDP.
C)  be determining value added for the economy.
D)  be measuring GDP.E) A) and B)
F) None of the above

Question 8

Refer to the information below.The gross domestic product for this economy is: All figures are in billions.

Accepted Answer

A)  $584
B)  $592
C)  $609
D)  $636E) None of the above
F) B) and C)

Question 9

Transfer payments are:

Accepted Answer

A)  excluded when calculating GDP because they only reflect inflation.
B)  excluded when calculating GDP because they do not reflect current production.
C)  included when calculating GDP because they are a category of investment spending.
D)  included when calculating GDP because they increase the spending of recipients.E) B) and C)
F) C) and D)

Question 10

Gross private domestic investment exceeds depreciation in an economy experiencing expanding production capacity.

Accepted Answer

A) True 
 B)False

Question 11

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) .  Refer to the above data.From 2005 to 2006, prices rose by approximately:

Accepted Answer

A)  2 percent.
B)  4.2 percent.
C)  6 percent.
D)  7 percent.E) B) and D)
F) None of the above

Question 12

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.Real GDP in year 2 was approximately:

Accepted Answer

A)  $3,245 billion.
B)  $3,271 billion.
C)  $3,295 billion.
D)  $3,402 billion.E) None of the above
F) B) and C)

Question 13

A nation's capital stock was valued at $300 billion at the start of the year and $350 billion at the end.Consumption of private fixed capital in the year was $25 billion.Assuming stable prices, gross investment was:

Accepted Answer

A)  $25 billion.
B)  $50 billion.
C)  $75 billion.
D)  $90 billion.E) C) and D)
F) None of the above

Question 14

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 as the base year, the price index for year one is:

Accepted Answer

A)  80
B)  100
C)  120
D)  20E) C) and D)
F) B) and D)

Question 15

Subtracting the purchase of intermediate products from the value of the sales of final products determines the amount of:

Accepted Answer

A)  net investment for a business.
B)  profit and cost.
C)  value added from the economic activity.
D)  surplus or deficit from the economic activity.E) A) and B)
F) A) and C)

Question 16

The following are national income account data for a hypothetical economy in billions of dollars: gross investment ($320) ; imports ($35) ; exports ($22) ; personal consumption expenditures ($2,460) ; and, government purchases ($470) .What is GDP in this economy?

Accepted Answer

A)  $3,237 billion
B)  $3,263 billion
C)  $3,273 billion
D)  $3,290 billionE) B) and C)
F) None of the above

Question 17

A price index can rise from one year to the next even though:

Accepted Answer

A)  some individual prices in the economy fall.
B)  nominal GDP falls.
C)  real GDP falls.
D)  all of the above occur.E) B) and D)
F) A) and B)

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 B)
F) None of the above

Question 19

Net Domestic Income at the factor cost refers to the:

Accepted Answer

A)  total income earned by Canadian-supplied factors of production as wages, interest, rent and profit.
B)  total income earned by foreign-supplied factors of production as wages, interest, rent and profit.
C)  total income earned by foreign-supplied and Canadian-supplied factors of production as wages, interest, rent and profit.
D)  total income earned by Canadian households.E) All of the above
F) C) and D)

Question 20

In an economy, the value of inventories fell by $50 billion from Year 1 to Year 2.In calculating total investment for Year 2, national income accountants would increase it by $50 billion.

Accepted Answer

A) True 
 B)False

Exam 7: B: Measuring the Economys Output

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) . Refer to the above data.From 2005 to 2006, prices rose by approximately:

Correct Answer
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Net Domestic Income at the factor cost refers to the:

Correct Answer
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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.Real GDP in year 2 was approximately:

Correct Answer
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Correct Answer
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GDP includes:

Correct Answer
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GDP is the total market value of:

Correct Answer
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In an economy, the value of inventories fell by $50 billion from Year 1 to Year 2.In calculating total investment for Year 2, national income accountants would increase it by $50 billion.

Correct Answer
verified

A nation's capital stock was valued at $300 billion at the start of the year and $350 billion at the end.Consumption of private fixed capital in the year was $25 billion.Assuming stable prices, gross investment was:

Correct Answer
verified

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 as the base year, the price index for year one is:

Correct Answer
verified

By summing the dollar value of all market transactions in the economy we would:

Correct Answer
verified

In the treatment of Canadian exports and imports, national income accountants:

Correct Answer
verified

Gross private domestic investment exceeds depreciation in an economy experiencing expanding production capacity.

Correct Answer
verified

The following are national income account data for a hypothetical economy in billions of dollars: gross investment ($320) ; imports ($35) ; exports ($22) ; personal consumption expenditures ($2,460) ; and, government purchases ($470) .What is GDP in this economy?

Correct Answer
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Gross domestic product (GDP) is equal to personal consumption expenditures:

Correct Answer
verified

Transfer payments are:

Correct Answer
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Assume a manufacturer of stereo speakers purchases $40 worth of components for each speaker.The completed speaker sells for $70.The value added by the manufacturer for each speaker is:

Correct Answer
verified

GDP by the expenditure approach is equal to:

Correct Answer
verified

A price index can rise from one year to the next even though:

Correct Answer
verified

Refer to the information below.The gross domestic product for this economy is: All figures are in billions.

Correct Answer
verified

Subtracting the purchase of intermediate products from the value of the sales of final products determines the amount of:

Correct Answer
verified

Exam 7: B: Measuring the Economys Output

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) . Refer to the above data.From 2005 to 2006, prices rose by approximately:

Correct AnswerverifiedShow Answer

Net Domestic Income at the factor cost refers to the:

Correct AnswerverifiedShow Answer

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.Real GDP in year 2 was approximately:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

GDP includes:

Correct AnswerverifiedShow Answer

GDP is the total market value of:

Correct AnswerverifiedShow Answer

In an economy, the value of inventories fell by $50 billion from Year 1 to Year 2.In calculating total investment for Year 2, national income accountants would increase it by $50 billion.

Correct AnswerverifiedShow Answer

A nation's capital stock was valued at $300 billion at the start of the year and $350 billion at the end.Consumption of private fixed capital in the year was $25 billion.Assuming stable prices, gross investment was:

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 as the base year, the price index for year one is:

Correct AnswerverifiedShow Answer

By summing the dollar value of all market transactions in the economy we would:

Correct AnswerverifiedShow Answer

In the treatment of Canadian exports and imports, national income accountants:

Correct AnswerverifiedShow Answer

Gross private domestic investment exceeds depreciation in an economy experiencing expanding production capacity.

Correct AnswerverifiedShow Answer

The following are national income account data for a hypothetical economy in billions of dollars: gross investment ($320) ; imports ($35) ; exports ($22) ; personal consumption expenditures ($2,460) ; and, government purchases ($470) .What is GDP in this economy?

Correct AnswerverifiedShow Answer

Gross domestic product (GDP) is equal to personal consumption expenditures:

Correct AnswerverifiedShow Answer

Transfer payments are:

Correct AnswerverifiedShow Answer

Assume a manufacturer of stereo speakers purchases $40 worth of components for each speaker.The completed speaker sells for $70.The value added by the manufacturer for each speaker is:

Correct AnswerverifiedShow Answer

GDP by the expenditure approach is equal to:

Correct AnswerverifiedShow Answer

A price index can rise from one year to the next even though:

Correct AnswerverifiedShow Answer

Refer to the information below.The gross domestic product for this economy is: All figures are in billions.

Correct AnswerverifiedShow Answer

Subtracting the purchase of intermediate products from the value of the sales of final products determines the amount of:

Correct AnswerverifiedShow Answer

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