Question 1

How should Robert's contributions to GDP be calculated?

Accepted Answer

A)   using his income,not his expenditure
B)   using his expenditure,not his income
C)   using both his income and his expenditure
D)   using either his income or his expenditure,but not both

Question 2

If the GDP deflator is 400 and nominal GDP is $2 trillion billion,what is real GDP?

Accepted Answer

A)   $5 billion
B)   $200 billion
C)   $500 billion
D)   $2 trillion

Question 3

If a small country has current nominal GDP of $20 billion and the GDP deflator is 125,what is its real GDP?

Accepted Answer

A)   $16 billion
B)   $105 billion
C)   $ 145 billion
D)   $625 billion

Question 4

How is NNP calculated?

Accepted Answer

A)   by subtracting savings from the total income of citizens of a nation
B)   by subtracting business expenses and taxes from the total profits earned by citizens of a nation
C)   by subtracting depreciation from the total income of citizens of a nation
D)   by subtracting depreciation from the total profits earned by citizens of a nation

Question 5

An Italian company opens a pasta company in Ottawa.Where are the profits from this pasta company included?

Accepted Answer

A)   in both Canadian and Italian GNP
B)   in both Canadian and Italian GDP
C)   in Canadian GNP and Italian GDP
D)   in Canadian GDP and Italian GNP

Question 6

A country reported a nominal GDP of $115 billion in 2015 and $125 billion in 2014 and reported a GDP deflator of 85 in 2015 and 100 in 2014.What happened to real output and prices from 2014 to 2015?

Accepted Answer

A)   Real output and prices both rose.
B)   Real output fell and prices rose.
C)   Real output rose and prices fell.
D)   Real output and prices both fell.

Question 7

In order to include many different products in an aggregate measure,how is GDP computed?

Accepted Answer

A)   using values of goods based on consumers' tastes
B)   using primarily costs of production
C)   using primarily market prices
D)   using weights that are computed by how much of a particular good is produced relative to total output

Question 8

What does the simple circular-flow diagram illustrate?

Accepted Answer

A)   that expenditure generates income so that income and the value of production are equal
B)   that the economy's income exceeds its expenditure
C)   that factors of production "flow" from firms to households
D)   that money "flows" from households to firms

Question 9

Table 5-2 
-Refer to the Table 5-2.What is the GNP for this economy?

Accepted Answer

A)   $410
B)   $435
C)   $440
D)   $460

Question 10

Many things that society values,such as good health,high-quality education,enjoyable recreation opportunities,and desirable moral attributes of the population,are NOT measured as part of GDP.According to most economists,why is GDP a useful measure of society's well-being?

Accepted Answer

A)   It has been measured for many years and changing this measure would create confusion.
B)   Providing these other attributes is the responsibility of government.
C)   It measures a nation's ability to produce the things that contribute to well-being.
D)   These other values cannot actually be measured.

Question 11

What would be the cause of a 2% increase in nominal GDP?

Accepted Answer

A)   a 1% increase in prices of and a 3% decrease in output
B)   a 1% decrease in prices and a 1% increase in output
C)   a 1% increase in prices and a 1% increase in output
D)   a 3% increase in prices and a 1% increase in output

Question 12

According to the simple circular-flow model,what do firms buy from households?

Accepted Answer

A)   natural resources,such as oil and minerals
B)   goods and services
C)   inventions and innovations
D)   labour

Question 13

How is the value of housing services included in GDP?

Accepted Answer

A)   It is valued as the annual depreciation of the house.
B)   It is valued as the mortgage payment made on the house.
C)   It uses the purchase price of the house in the year it is sold.
D)   It is based on an estimate of its rental value.

Question 14

Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments) .Suppose the value of the condominium owners' housing services is now the same as their former rent.What happens to GDP?

Accepted Answer

A)   GDP necessarily increases.
B)   GDP necessarily decreases.
C)   GDP is unaffected because neither the rent nor the estimate of the value of housing services is included in GDP.
D)   GDP is unaffected because previously rent was included in GDP,and now it is replaced by the estimate of the value of housing services.

Question 15

Which of the following is included in the investment component of GDP?

Accepted Answer

A)   purchases of previously owned homes
B)   purchases of government bonds
C)   purchases of new cars
D)   purchases of new houses

Question 16

Alcestis and her family are the only inhabitants of Elafonisos,a small island off the coast of Greece.She only produces fresh fish,which she can sell to clients from nearby islands for 2 euros per kilo.Last year,Alcestis caught 800 kg of fish; she consumed 50 kg and sold the remaining 750 kg for €1500.She used €1000 to buy food and clothing,and she used the remaining €500 for a new fishing boat that she bought from another island.Calculate the following for Elafonisos:
​
a)GDP,as the value of production
b)Consumption
c)Investment
d)Exports
e)Imports
f)Net Exports
g)GDP,as total expenditure

Accepted Answer

a)GDP = 800 × 2= €1,600 b)Consumption = ...

Question 17

Which of the following is a macroeconomic issue?

Accepted Answer

A)   how many workers a firm employs
B)   how changes in the money supply affect interest rates
C)   how an increase in wages changes costs of production
D)   how an income tax changes a person's decision to look for a job

Question 18

What is included in GDP?

Accepted Answer

A)   the sale of stocks and bonds
B)   the estimated rental value of owner-occupied housing
C)   unpaid production of goods and services at home
D)   proceeds of a garage sale

Question 19

How are goods that go into inventory and are not sold during the current period treated in GDP terms?

Accepted Answer

A)   They are counted as intermediate goods and so are not included in current-period GDP.
B)   They are counted in current GDP only if the firm that produced them sells them to another firm.
C)   They are included in current-period GDP as inventory investment.
D)   They are included in current-period GDP as consumption.

Question 20

According to economists,why is it useful to measure the behaviour of the economy with statistics such as GDP?

Accepted Answer

A)   It can be used to forecast economic recessions and prevent them.
B)   It measures the total value of a country's wealth.
C)   It can be helpful in developing macroeconomic science,but is not useful for policymaking.
D)   It is a crucial step toward developing the science of macroeconomics.

Exam 5: Measuring a Nations Income

In order to include many different products in an aggregate measure,how is GDP computed?

Correct Answer
verified

How are goods that go into inventory and are not sold during the current period treated in GDP terms?

Correct Answer
verified

How is the value of housing services included in GDP?

Correct Answer
verified

How should Robert's contributions to GDP be calculated?

Correct Answer
verified

How is NNP calculated?

Correct Answer
verified

According to the simple circular-flow model,what do firms buy from households?

Correct Answer
verified

Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments) .Suppose the value of the condominium owners' housing services is now the same as their former rent.What happens to GDP?

Correct Answer
verified

Table 5-2 -Refer to the Table 5-2.What is the GNP for this economy?

Correct Answer
verified

What would be the cause of a 2% increase in nominal GDP?

Correct Answer
verified

Which of the following is included in the investment component of GDP?

Correct Answer
verified

If a small country has current nominal GDP of $20 billion and the GDP deflator is 125,what is its real GDP?

Correct Answer
verified

An Italian company opens a pasta company in Ottawa.Where are the profits from this pasta company included?

Correct Answer
verified

Correct Answer
verified
a)GDP = 800 × 2= €1,600 b)Consumption = ...
View Answer

What is included in GDP?

Correct Answer
verified

Many things that society values,such as good health,high-quality education,enjoyable recreation opportunities,and desirable moral attributes of the population,are NOT measured as part of GDP.According to most economists,why is GDP a useful measure of society's well-being?

Correct Answer
verified

A country reported a nominal GDP of $115 billion in 2015 and $125 billion in 2014 and reported a GDP deflator of 85 in 2015 and 100 in 2014.What happened to real output and prices from 2014 to 2015?

Correct Answer
verified

What does the simple circular-flow diagram illustrate?

Correct Answer
verified

According to economists,why is it useful to measure the behaviour of the economy with statistics such as GDP?

Correct Answer
verified

If the GDP deflator is 400 and nominal GDP is $2 trillion billion,what is real GDP?

Correct Answer
verified

Which of the following is a macroeconomic issue?

Correct Answer
verified

Exam 5: Measuring a Nations Income

In order to include many different products in an aggregate measure,how is GDP computed?

Correct AnswerverifiedShow Answer

How are goods that go into inventory and are not sold during the current period treated in GDP terms?

Correct AnswerverifiedShow Answer

How is the value of housing services included in GDP?

Correct AnswerverifiedShow Answer

How should Robert's contributions to GDP be calculated?

Correct AnswerverifiedShow Answer

How is NNP calculated?

Correct AnswerverifiedShow Answer

According to the simple circular-flow model,what do firms buy from households?

Correct AnswerverifiedShow Answer

Suppose an apartment complex converts to a condominium (i.e.,the renters become owners of their apartments) .Suppose the value of the condominium owners' housing services is now the same as their former rent.What happens to GDP?

Correct AnswerverifiedShow Answer

Table 5-2 -Refer to the Table 5-2.What is the GNP for this economy?

Correct AnswerverifiedShow Answer

What would be the cause of a 2% increase in nominal GDP?

Correct AnswerverifiedShow Answer

Which of the following is included in the investment component of GDP?

Correct AnswerverifiedShow Answer

If a small country has current nominal GDP of $20 billion and the GDP deflator is 125,what is its real GDP?

Correct AnswerverifiedShow Answer

An Italian company opens a pasta company in Ottawa.Where are the profits from this pasta company included?

Correct AnswerverifiedShow Answer

Correct Answerverifieda)GDP = 800 × 2= €1,600 b)Consumption = ...View AnswerShow Answer

What is included in GDP?

Correct AnswerverifiedShow Answer

Many things that society values,such as good health,high-quality education,enjoyable recreation opportunities,and desirable moral attributes of the population,are NOT measured as part of GDP.According to most economists,why is GDP a useful measure of society's well-being?

Correct AnswerverifiedShow Answer

A country reported a nominal GDP of $115 billion in 2015 and $125 billion in 2014 and reported a GDP deflator of 85 in 2015 and 100 in 2014.What happened to real output and prices from 2014 to 2015?

Correct AnswerverifiedShow Answer

What does the simple circular-flow diagram illustrate?

Correct AnswerverifiedShow Answer

According to economists,why is it useful to measure the behaviour of the economy with statistics such as GDP?

Correct AnswerverifiedShow Answer

If the GDP deflator is 400 and nominal GDP is $2 trillion billion,what is real GDP?

Correct AnswerverifiedShow Answer

Which of the following is a macroeconomic issue?

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
verified

Correct Answer
verified
a)GDP = 800 × 2= €1,600 b)Consumption = ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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