Question 1

GDP measured using current prices is called:

Accepted Answer

A)  nominal GDP.
B)  real GDP.
C)  constant GDP.
D)  deflated GDP.E) B) and D)
F) A) and D)

Question 2

An example of an intermediate good or service would be:

Accepted Answer

A)  bricks bought by a homeowner for constructing a patio.
B)  sacks of groceries bought by a dentist for his family.
C)  a car bought by a household for commuting to work.
D)  a desk bought by an accountant for her office.E) C) and D)
F) All of the above

Question 3

(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) None of the above
F) A) and D)

Question 4

As of the publication date of the text, what years is currently being used by Statistics Canada as the base year for calculating the price index?

Accepted Answer

A)  2001
B)  2007
C)  2010
D)  2017E) C) and D)
F) B) and C)

Question 5

In determining real GDP economists adjust the nominal GDP by using the:

Accepted Answer

A)  national productivity index.
B)  wholesale (producer)  price index.
C)  GDP price index.
D)  consumer price index.E) None of the above
F) A) and B)

Question 6

If depreciation (consumption of fixed capital)  exceeds gross investment, it can be concluded that:

Accepted Answer

A)  nominal GDP is rising but real GDP is declining.
B)  net investment is negative.
C)  the economy is importing more than it exports.
D)  the economy is expanding.E) A) and B)
F) B) and C)

Question 7

Value added is the value of a firm's output minus:

Accepted Answer

A)  the value of intermediate goods purchased from other firms.
B)  the compensation it pays to employees.
C)  the value of its capital goods.
D)  its depreciation.E) A) and B)
F) A) and C)

Question 8

In calculating GDP, governmental transfer payments, such as welfare payments, are:

Accepted Answer

A)  not counted.
B)  counted as investment spending.
C)  counted as government spending.
D)  counted as consumption spending.E) B) and C)
F) A) and D)

Question 9

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

Question 10

The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940) ; personal consumption expenditures ($4,920) ; imports ($170) ; exports ($133) ; gross investment ($640) .What is GDP in this economy?

Accepted Answer

A)  $6,463 billion
B)  $6,500 billion
C)  $6,537 billion
D)  $6,633 billionE) B) and C)
F) All of the above

Question 11

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) C) and D)
F) A) and B)

Question 12

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, real GDP for year 1 is:

Accepted Answer

A)  $25
B)  $100
C)  $50
D)  $80E) A) and D)
F) A) and C)

Question 13

To calculate the real GDP, Statistics Canada has started to consider both the quantities and prices in the base year and the following year and then average the two.

Accepted Answer

A) True 
 B)False

Question 14

Interest on the public debt is included as a part of government purchases in determining GDP by the expenditures method.

Accepted Answer

A) True 
 B)False

Question 15

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, the price index for year 3 is:

Accepted Answer

A)  120
B)  125
C)  133
D)  150E) B) and D)
F) B) and C)

Question 16

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) All of the above

Question 17

If real GDP falls from one period to another, we can conclude that:

Accepted Answer

A)  deflation occurred.
B)  inflation occurred.
C)  nominal GDP fell.
D)  less goods and services have been produced.E) All of the above
F) A) and C)

Question 18

The amount of after-tax income received by households is measured by:

Accepted Answer

A)  discretionary income.
B)  net domestic income.
C)  disposable income.
D)  personal income.E) All of the above
F) C) and D)

Question 19

Gross investment refers to:

Accepted Answer

A)  private investment minus public investment.
B)  net investment plus replacement investment.
C)  net investment after it has been "inflated" for changes in the price level.
D)  net investment plus net exports.E) C) and D)
F) B) and C)

Question 20

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 B)
F) A) and C)

Exam 7: Part B: Measuring the Economys Output

If depreciation (consumption of fixed capital) exceeds gross investment, it can be concluded that:

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Gross investment refers to:

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An example of an intermediate good or service would be:

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

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If real GDP falls from one period to another, we can conclude that:

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The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940) ; personal consumption expenditures ($4,920) ; imports ($170) ; exports ($133) ; gross investment ($640) .What is GDP in this economy?

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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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Value added is the value of a firm's output minus:

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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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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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As of the publication date of the text, what years is currently being used by Statistics Canada as the base year for calculating the price index?

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GDP measured using current prices is called:

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In calculating GDP, governmental transfer payments, such as welfare payments, are:

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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:

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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.If year 2 is chosen as the base year, real GDP for year 1 is:

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The amount of after-tax income received by households is measured by:

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Interest on the public debt is included as a part of government purchases in determining GDP by the expenditures method.

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In determining real GDP economists adjust the nominal GDP by using the:

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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, the price index for year 3 is:

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To calculate the real GDP, Statistics Canada has started to consider both the quantities and prices in the base year and the following year and then average the two.

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