Question 1

Refer to the above diagram.Which of the following statements is correct?

Accepted Answer

A)  The price index is greater than 100 for every year shown on the graph.
B)  Nominal GDP must be deflated in each year prior to 1992 to determine real GDP.
C)  Real GDP has grown in this economy, but nominal GDP has not.
D)  Nominal GDP must be deflated in each year since 1992 to determine real GDP.E) B) and D)
F) C) and D)

Question 2

The GDP figure by the income approach will be identical to the GDP by the expenditure approach if we add to the Net Domestic income:

Accepted Answer

A)  the capital consumption allowances and the investment income.
B)  the capital consumption allowances and the interest payments to the owners of capital.
C)  the indirect taxes and the capital consumption allowances.
D)  profits of the corporations and the capital consumption allowances.E) C) and D)
F) A) and D)

Question 3

Which of the following of the countries listed and using Image 7.1 Global Perspective, which country had the highest GDP in 2016?

Accepted Answer

A)  Japan
B)  Germany
C)  France
D)  United KingdomE) C) and D)
F) A) and B)

Question 4

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 C)
F) All of the above

Question 5

Gross domestic product is what type of measure?

Accepted Answer

A)  Monetary
B)  Fiscal
C)  Physical
D)  CashE) B) and C)
F) C) and D)

Question 6

Assume that the size of the underground economy increases both absolutely and relatively over time.As a result:

Accepted Answer

A)  real GDP will rise more rapidly than nominal GDP.
B)  GDP will tend to increasingly understate the level of output through time.
C)  GDP will tend to increasingly overstate the level of output through time.
D)  the accuracy of GDP will be unaffected through time.E) None of the above
F) A) and B)

Question 7

Suppose the total market value of all final goods and services produced in a particular country is $600 billion and the total market value of final goods and services sold is $525 billion in 2020.We can conclude that:

Accepted Answer

A)  GDP is $525 billion in 2020.
B)  NDI is $525 billion in 2020.
C)  GDP is $600 billion in 2020.
D)  inventories fell by $75 billion in 2020.E) C) and D)
F) A) and C)

Question 8

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

Accepted Answer

A)  is $110.
B)  is $115.
C)  is $45.
D)  cannot be determined on the basis of this data.E) A) and B)
F) A) and C)

Question 9

GDP data are criticized as being inaccurate measures of economic welfare because:

Accepted Answer

A)  they do not take into account changes in the amount of leisure.
B)  they do not take into account changes in product quality.
C)  they do not take into account the adverse effects of economic activity on the environment.
D)  all of these.E) All of the above
F) A) and B)

Question 10

GDP tends to underestimate the productive activity in the economy because it excludes the value of output from:

Accepted Answer

A)  public transfer payments to households.
B)  the consumption of fixed capital.
C)  intermediate goods.
D)  the underground economy.E) A) and D)
F) A) and C)

Question 11

Some of the production of an economy creates pollution.As a result:

Accepted Answer

A)  nominal GDP is greater than real GDP.
B)  real GDP is greater than nominal GDP.
C)  GDP tends to understate social welfare.
D)  GDP tends to overstate social welfare.E) A) and D)
F) B) and C)

Question 12

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:

Accepted Answer

A)  may have either increased or decreased.
B)  increased by $65 billion.
C)  increased by $55 billion.
D)  decreased by $55 billion.E) A) and C)
F) A) and B)

Question 13

Of the countries listed in Image 7.2 Global Perspective the underground economy in 2016 as a percentage of GDP, which country has the highest percentage?

Accepted Answer

A)  Sweden
B)  Germany
C)  Canada
D)  United StatesE) A) and B)
F) All of the above

Question 14

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 D)

Question 15

Which of the following do national income accountants consider to be "investment"?

Accepted Answer

A)  the purchase of an automobile for private, non-business use
B)  the purchase of a new house
C)  the purchase of corporate bonds
D)  the purchase of gold coinsE) C) and D)
F) A) and D)

Question 16

In an economy experiencing a declining production capacity:

Accepted Answer

A)  the nation's stock of capital goods is expanding.
B)  net exports are necessarily zero.
C)  Net Investment exceeds GDP.
D)  depreciation exceeds gross investment.E) B) and D)
F) None of the above

Question 17

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

Question 18

Wages, salaries, and supplementary labour income in Canada:

Accepted Answer

A)  is about 30% of the income categories.
B)  is the smallest category in the calculation of the GDP by the income approach.
C)  is the largest category in the calculation of the GDP by the income approach.
D)  is the only category in the calculation of the GDP by the income approach.E) A) and B)
F) A) and C)

Question 19

Refer to the information below.GDP is: All figures are in billions of dollars.

Accepted Answer

A)  $422
B)  $467
C)  $417
D)  $402E) A) and B)
F) A) and C)

Question 20

In calculating GDP by the income approach, we should sum up:

Accepted Answer

A)  wages, consumption, investment and rent.
B)  wages, rent, interest and profit income.
C)  wages, interest, investment, and exports.
D)  wages, profit income, investment, and consumption.E) B) and C)
F) None of the above

Exam 7: B: Measuring the Economys Output

GDP tends to underestimate the productive activity in the economy because it excludes the value of output from:

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

Correct Answer
verified

Assume that the size of the underground economy increases both absolutely and relatively over time.As a result:

Correct Answer
verified

In an economy experiencing a declining production capacity:

Correct Answer
verified

In calculating GDP by the income approach, we should sum up:

Correct Answer
verified

Wages, salaries, and supplementary labour income in Canada:

Correct Answer
verified

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:

Correct Answer
verified

Refer to the above diagram.Which of the following statements is correct?

Correct Answer
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Which of the following do national income accountants consider to be "investment"?

Correct Answer
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Correct Answer
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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:

Correct Answer
verified

Of the countries listed in Image 7.2 Global Perspective the underground economy in 2016 as a percentage of GDP, which country has the highest percentage?

Correct Answer
verified

GDP data are criticized as being inaccurate measures of economic welfare because:

Correct Answer
verified

Which of the following of the countries listed and using Image 7.1 Global Perspective, which country had the highest GDP in 2016?

Correct Answer
verified

Suppose the total market value of all final goods and services produced in a particular country is $600 billion and the total market value of final goods and services sold is $525 billion in 2020.We can conclude that:

Correct Answer
verified

Correct Answer
verified

Gross domestic product is what type of measure?

Correct Answer
verified

The GDP figure by the income approach will be identical to the GDP by the expenditure approach if we add to the Net Domestic income:

Correct Answer
verified

Refer to the information below.GDP is: All figures are in billions of dollars.

Correct Answer
verified

Some of the production of an economy creates pollution.As a result:

Correct Answer
verified

Exam 7: B: Measuring the Economys Output

GDP tends to underestimate the productive activity in the economy because it excludes the value of output from:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Assume that the size of the underground economy increases both absolutely and relatively over time.As a result:

Correct AnswerverifiedShow Answer

In an economy experiencing a declining production capacity:

Correct AnswerverifiedShow Answer

In calculating GDP by the income approach, we should sum up:

Correct AnswerverifiedShow Answer

Wages, salaries, and supplementary labour income in Canada:

Correct AnswerverifiedShow Answer

If in some year gross investment was $120 billion and net investment was $65 billion, then in that year the country's capital stock:

Correct AnswerverifiedShow Answer

Refer to the above diagram.Which of the following statements is correct?

Correct AnswerverifiedShow Answer

Which of the following do national income accountants consider to be "investment"?

Correct AnswerverifiedShow Answer

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.If year 2 is the base year, the price index for year 3 is:

Correct AnswerverifiedShow Answer

Of the countries listed in Image 7.2 Global Perspective the underground economy in 2016 as a percentage of GDP, which country has the highest percentage?

Correct AnswerverifiedShow Answer

GDP data are criticized as being inaccurate measures of economic welfare because:

Correct AnswerverifiedShow Answer

Which of the following of the countries listed and using Image 7.1 Global Perspective, which country had the highest GDP in 2016?

Correct AnswerverifiedShow Answer

Suppose the total market value of all final goods and services produced in a particular country is $600 billion and the total market value of final goods and services sold is $525 billion in 2020.We can conclude that:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Gross domestic product is what type of measure?

Correct AnswerverifiedShow Answer

The GDP figure by the income approach will be identical to the GDP by the expenditure approach if we add to the Net Domestic income:

Correct AnswerverifiedShow Answer

Refer to the information below.GDP is: All figures are in billions of dollars.

Correct AnswerverifiedShow Answer

Some of the production of an economy creates pollution.As a result:

Correct AnswerverifiedShow Answer

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