Question 1

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 2

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

Question 3

Net income from farms and unincorporated businesses is defined as:

Accepted Answer

A)   the earnings of investment of corporate businesses.
B)   the earnings of corporate stock holders.
C)   the earnings of government received from farmers.
D)   the earnings of farmers and proprietors from their own businesses.E) B) and C)
F) All of the above

Question 4

GDP tends to underestimate the productive activity in the economy because it excludes:

Accepted Answer

A)   spending by the government on military goods.
B)   spending by businesses to reduce the level of pollution.
C)   the work done by construction companies to remodel homes.
D)   the personal labour time homeowners spend on home repairs.E) A) and B)
F) B) and C)

Question 5

Money spent on the purchase of a new house is included in the GDP as a part of:

Accepted Answer

A)   the consumption of private fixed capital.
B)   personal consumption expenditures.
C)   personal saving.
D)   investment.E) B) and C)
F) C) and D)

Question 6

The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($1,050) ;personal consumption expenditures ($4,800) ;imports ($370) ;exports ($240) ;gross investment ($1,130) .Personal consumption expenditures are approximately what percentage of this economy?

Accepted Answer

A)   60 percent
B)   65 percent
C)   70 percent
D)   75 percentE) B) and D)
F) None of the above

Question 7

-Refer to the above information.Canadian imports:

Accepted Answer

A)   cannot be calculated
B)   are $26.
C)   are $16.
D)   are $11.E) B) and C)
F) A) and D)

Question 8

Real GDP measures:

Accepted Answer

A)   current output at current prices.
B)   current output at base year prices.
C)   base year output at current prices.
D)   base year output at current exchange rates.E) A) and B)
F) All of the above

Question 9

The GDP is the:

Accepted Answer

A)   monetary value of all final goods and services produced within a nation in a particular year.
B)   national income minus all non-income charges against output.
C)   monetary value of all economic resources used in producing a year's output.
D)   monetary value of all goods and services,final and intermediate,produced in a specific year.E) A) and D)
F) None of the above

Question 10

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

Question 11

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) None of the above
F) A) and B)

Question 12

In an economy,the total expenditures for a market basket of goods in year 1 (the base year) was $5,000 billion.In year 2,the total expenditure for the same market basket of goods was $5,500 billion.What was the GDP price index for the economy in year 2?

Accepted Answer

A)   100
B)   110
C)   115
D)   120E) B) and C)
F) A) and B)

Question 13

Environmental pollution is accounted for in:

Accepted Answer

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

Question 14

In one year nominal GDP was $286 billion and the price index was 88.Real GDP in that year was:

Accepted Answer

A)   $252 billion.
B)   $325 billion.
C)   $308 billion.
D)   $262 billion.E) B) and C)
F) A) and D)

Question 15

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

Question 16

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) .
 
-Refer to the above data.From 2003 to 2006,prices rose by:

Accepted Answer

A)   3 percent.
B)   7 percent.
C)   9 percent.
D)   10.7 percent.E) C) and D)
F) A) and D)

Question 17

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) None of the above
F) A) and C)

Question 18

If real GDP is 50 and nominal GDP is 100,the GDP price index is 200.

Accepted Answer

A) True 
 B)False

Question 19

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) B) and D)

Question 20

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

Exam 7: Measuring the Economys Output

Real GDP measures:

Correct Answer
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Money spent on the purchase of a new house is included in the GDP as a part of:

Correct Answer
verified

GDP tends to underestimate the productive activity in the economy because it excludes:

Correct Answer
verified

-Refer to the above information.Canadian imports:

Correct Answer
verified

Net income from farms and unincorporated businesses is defined as:

Correct Answer
verified

The GDP is the:

Correct Answer
verified

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) . -Refer to the above data.From 2003 to 2006,prices rose by:

Correct Answer
verified

Environmental pollution is accounted for in:

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

In one year nominal GDP was $286 billion and the price index was 88.Real GDP in that year was:

Correct Answer
verified

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?

Correct Answer
verified

In an economy,the total expenditures for a market basket of goods in year 1 (the base year) was $5,000 billion.In year 2,the total expenditure for the same market basket of goods was $5,500 billion.What was the GDP price index for the economy in year 2?

Correct Answer
verified

Which of the following is not an economic investment?

Correct Answer
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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

If real GDP is 50 and nominal GDP is 100,the GDP price index is 200.

Correct Answer
verified

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

Correct Answer
verified

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
verified

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 Answer
verified

Exam 7: Measuring the Economys Output

Real GDP measures:

Correct AnswerverifiedShow Answer

Money spent on the purchase of a new house is included in the GDP as a part of:

Correct AnswerverifiedShow Answer

GDP tends to underestimate the productive activity in the economy because it excludes:

Correct AnswerverifiedShow Answer

-Refer to the above information.Canadian imports:

Correct AnswerverifiedShow Answer

Net income from farms and unincorporated businesses is defined as:

Correct AnswerverifiedShow Answer

The GDP is the:

Correct AnswerverifiedShow Answer

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) . -Refer to the above data.From 2003 to 2006,prices rose by:

Correct AnswerverifiedShow Answer

Environmental pollution is accounted for in:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In one year nominal GDP was $286 billion and the price index was 88.Real GDP in that year was:

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

In an economy,the total expenditures for a market basket of goods in year 1 (the base year) was $5,000 billion.In year 2,the total expenditure for the same market basket of goods was $5,500 billion.What was the GDP price index for the economy in year 2?

Correct AnswerverifiedShow Answer

Which of the following is not an economic investment?

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

If real GDP is 50 and nominal GDP is 100,the GDP price index is 200.

Correct AnswerverifiedShow Answer

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

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

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 AnswerverifiedShow Answer

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