Question 1

Which of the following is a shortcoming(s)  of GDP as a measure of total output?

Accepted Answer

A)  GDP does not include unpaid work.
B)  GDP does not include activities in the underground economy.
C)  GDP does not capture the full value of improvements in product quality.
D)  All the answer choices are correct.E) B) and C)
F) All of the above

Question 2

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

Question 3

The GDP price index:

Accepted Answer

A)  includes fewer goods and services than the consumer price index.
B)  is identical to the consumer price index.
C)  is another term for the producer price index.
D)  includes all goods comprising the nation's domestic output.E) A) and C)
F) B) and D)

Question 4

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) .  Refer to the above data.Real GDP in 2006 was approximately:

Accepted Answer

A)  $3,433 billion.
B)  $3,743 billion.
C)  $4,023 billion.
D)  $4,031 billion.E) B) and C)
F) A) and B)

Question 5

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

Question 6

Of the countries listed in Image 7.2 Global Perspective The underground economy as a percentage of GDP, which country has the lowest percentage?

Accepted Answer

A)  Sweden
B)  Germany
C)  Canada
D)  JapanE) A) and B)
F) A) and C)

Question 7

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.The nominal GDP for year 4:

Accepted Answer

A)  is $90.
B)  is $55.
C)  is $40.
D)  is $35.E) A) and B)
F) All of the above

Question 8

Using the income approach for calculating GDP, which of the following was the largest contributor to Canada's national income in 2017?

Accepted Answer

A)  Employee compensation
B)  Gross operating surplus
C)  Gross mixed income
D)  TaxesE) A) and D)
F) C) and D)

Question 9

If real GDP rises and the GDP price index has increased:

Accepted Answer

A)  the percentage increase in nominal GDP must have been less than the percentage increase in the price level.
B)  nominal GDP may have either increased or decreased.
C)  nominal GDP must have increased.
D)  nominal GDP must have fallen.E) A) and D)
F) All of the above

Question 10

Of the countries listed in Image 7.2 Global Perspective The underground economy as a percentage of GDP, which country has the highest percentage?

Accepted Answer

A)  Mexico
B)  South Korea
C)  India
D)  ItalyE) C) and D)
F) B) and C)

Question 11

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

Question 12

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

Question 13

An increase in inventories during 2022:

Accepted Answer

A)  will result in gross investment being higher than net investment by the amount of the inventory increase.
B)  should be ignored while calculating GDP for 2022.
C)  should be subtracted from GDP calculated for 2022.
D)  should be included in GDP calculated for 2022.E) All of the above
F) A) and B)

Question 14

Net exports are:

Accepted Answer

A)  that portion of consumption and investment goods sent to other countries.
B)  exports plus imports.
C)  exports less imports.
D)  imports less exports.E) A) and B)
F) B) and D)

Question 15

Nominal GDP is less than real GDP in an economy in year 1 and year 2.In year 3, nominal GDP is equal to real GDP.In year 4, nominal GDP is slightly greater than real GDP.In year 5, nominal GDP is significantly greater than real GDP.Which year is most likely to be the base year being used to calculate the price index for this economy?

Accepted Answer

A)  2
B)  3
C)  4
D)  5E) C) and D)
F) All of the above

Question 16

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 17

Gordon James is a person who sells narcotics "on the street." This type of illegal activity:

Accepted Answer

A)  would be considered double counting in calculating GDP.
B)  is estimated and included in GDP figures.
C)  is excluded from GDP figures.
D)  causes GDP to be overstated.E) A) and B)
F) A) and C)

Question 18

Tom Atoe grows tomatoes for home consumption.This activity is:

Accepted Answer

A)  excluded from GDP in order to avoid double counting.
B)  excluded from GDP because an intermediate good is involved.
C)  productive but is excluded from GDP because no market transaction occurs.
D)  included in GDP because it reflects production.E) A) and C)
F) B) and C)

Question 19

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 D)
F) A) and D)

Question 20

A nation's gross domestic product (GDP) :

Accepted Answer

A)  is the dollar value of the total output produced within the borders of the nation.
B)  is the dollar value of the total output produced by its citizens, regardless of where they are living.
C)  can be found by summing C + In+ S + Xn.
D)  is always some amount less than its C + Ig+ G + Xn.E) None of the above
F) C) and D)

Exam 7: B: Measuring the Economys Output

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
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Of the countries listed in Image 7.2 Global Perspective The underground economy as a percentage of GDP, which country has the lowest percentage?

Correct Answer
verified

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.The nominal GDP for year 4:

Correct Answer
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Net exports are:

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

Correct Answer
verified

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) . Refer to the above data.Real GDP in 2006 was approximately:

Correct Answer
verified

If real GDP rises and the GDP price index has increased:

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

An increase in inventories during 2022:

Correct Answer
verified

Tom Atoe grows tomatoes for home consumption.This activity is:

Correct Answer
verified

Of the countries listed in Image 7.2 Global Perspective The underground economy as a percentage of GDP, which country has the highest percentage?

Correct Answer
verified

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

Correct Answer
verified

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

Correct Answer
verified

Which of the following is a shortcoming(s) of GDP as a measure of total output?

Correct Answer
verified

Using the income approach for calculating GDP, which of the following was the largest contributor to Canada's national income in 2017?

Correct Answer
verified

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

Correct Answer
verified

Gordon James is a person who sells narcotics "on the street." This type of illegal activity:

Correct Answer
verified

The GDP price index:

Correct Answer
verified

A nation's gross domestic product (GDP) :

Correct Answer
verified

Exam 7: B: Measuring the Economys Output

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

Of the countries listed in Image 7.2 Global Perspective The underground economy as a percentage of GDP, which country has the lowest percentage?

Correct AnswerverifiedShow Answer

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.The nominal GDP for year 4:

Correct AnswerverifiedShow Answer

Net exports are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Following is data for a hypothetical economy.The base year is 2002 (Price index = 100) . Refer to the above data.Real GDP in 2006 was approximately:

Correct AnswerverifiedShow Answer

If real GDP rises and the GDP price index has increased:

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

An increase in inventories during 2022:

Correct AnswerverifiedShow Answer

Tom Atoe grows tomatoes for home consumption.This activity is:

Correct AnswerverifiedShow Answer

Of the countries listed in Image 7.2 Global Perspective The underground economy as a percentage of GDP, which country has the highest percentage?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is a shortcoming(s) of GDP as a measure of total output?

Correct AnswerverifiedShow Answer

Using the income approach for calculating GDP, which of the following was the largest contributor to Canada's national income in 2017?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Gordon James is a person who sells narcotics "on the street." This type of illegal activity:

Correct AnswerverifiedShow Answer

The GDP price index:

Correct AnswerverifiedShow Answer

A nation's gross domestic product (GDP) :

Correct AnswerverifiedShow Answer

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