Question 1

The Human Development Index does not incorporate which of the following statistics?

Accepted Answer

A)  life expectancy at birth
B)  average of years of schooling of the country's adult citizens
C)  the expected years of schooling for children of school-going age
D)  per capita GDP adjusted for purchasing power parity
E)  the percentage of a country's population living in povertyF) A) and B)
G) C) and E)

Question 2

Real GDP measures:

Accepted Answer

A)  current output in current dollars
B)  current output in constant dollars from a given year
C)  GDP per person in current dollars
D)  GDP per person in constant dollars from a given year
E)  current output adjusted to take account of price differences between countriesF) B) and E)
G) A) and E)

Question 3

Which of the following is not considered to be part of gross investment?

Accepted Answer

A)  the purchase of a lathe by the Ajax Manufacturing Company
B)  the purchase of 100 shares of BMO by a retired business executive
C)  the construction of a suburban housing project
D)  the building of a nursery school
E)  the increase in inventories by an auto companyF) A) and B)
G) All of the above

Question 4

GDP can be calculated by adding:

Accepted Answer

A)  consumption, gross investment, government purchases, exports, and imports
B)  gross investment, government purchases, consumption, and net exports
C)  consumption, net investment, wages, and rents
D)  consumption, gross investment, government purchases, and imports
E)  consumption, gross investment, government purchases, and exportsF) A) and B)
G) B) and D)

Question 5

Net exports may be defined as:

Accepted Answer

A)  the portion of domestic products sent to other countries
B)  exports plus imports
C)  exports minus imports
D)  imports minus exports
E)  exports minus net investment income to the rest of the worldF) B) and C)
G) None of the above

Question 6

Which of the following is an intermediate product?

Accepted Answer

A)  the purchase of gasoline for a holiday to Florida
B)  the purchase of a pizza by a hungry student
C)  the purchase of a family TV
D)  the purchase of roller blades by a teacher
E)  the purchase of pencils by a politician who is writing her memoirsF) B) and D)
G) A) and D)

Question 7

In 1933,net investment was -$5.8 billion.This meant that:

Accepted Answer

A)  gross investment exceeded depreciation by $5.8 billion
B)  the economy's capital stock was expanding 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)  the economy produced a negative amount of capital goods in 1933F) B) and E)
G) C) and D)

Question 8

If the size of the underground economy increases over time:

Accepted Answer

A)  real GDP will rise more rapidly than per capita real GDP
B)  GDP will increasingly tend to understate the level of output through time
C)  GDP will increasingly tend to overstate the level of output through time
D)  the accuracy of GDP will be unaffected through time
E)  per capita real GDP will rise more rapidly than real GDPF) B) and D)
G) C) and D)

Question 9

"Value added" refers to:

Accepted Answer

A)  any increase in GDP that has been adjusted for negative environmental effects
B)  the excess of a country's exports over its imports
C)  the excess of gross investment over net investment
D)  the difference between GDP and GNI
E)  the difference between the value of a business's output and the value of the resources that it has purchased from othersF) A) and B)
G) B) and E)

Question 10

Which of the following best defines disposable income?

Accepted Answer

A)  income received by households after payment of income taxes
B)  the before-tax income received by households
C)  all income earned by resource suppliers for their current contributions to production
D)  the market value of the annual output of all final goods and services
E)  the total income acquired by Canadians both within Canada and elsewhereF) A) and B)
G) A) and C)

Question 11

GDP includes:

Accepted Answer

A)  neither intermediate nor final products
B)  both intermediate and final products
C)  intermediate, but not final, products
D)  final, but not intermediate, products
E)  all natural resourcesF) B) and C)
G) A) and E)

Question 12

An economy is enlarging its stock of capital goods:

Accepted Answer

A)  when net investment exceeds gross investment
B)  only when gross investment exceeds net investment
C)  whenever gross investment is positive
D)  when depreciation exceeds gross investment
E)  when gross investment exceeds depreciationF) A) and C)
G) C) and D)

Question 13

If Holmes pays Weiss $190,then:

Accepted Answer

A)  we can say with certainty that GDP has increased by $190
B)  we can say with certainty that GDP has increased, but we cannot determine the amount
C)  we can say with certainty that GNI has increased, but we can't say whether GDP has increased or decreased
D)  we need more information to determine whether GDP has changed or not
E)  GDP and GNI have definitely stayed the sameF) A) and E)
G) A) and D)

Question 14

BGF Corporation buys $100 000 of sand,rock,and cement to produce ready-to-mix concrete.It sells 10 000 cubic meters of concrete at $30 per cubic meter.The value added by BGF Corporation is:

Accepted Answer

A)  $300 000
B)  $100 000
C)  $200 000
D)  $500 000
E)  $0F) A) and E)
G) B) and D)

Question 15

Economists define investment to include:

Accepted Answer

A)  any increase in business inventories
B)  the addition of cash to a savings account
C)  the purchase of common or preferred stock
D)  the purchase of any durable good
E)  the purchase of any non-durable goodF) A) and B)
G) A) and C)

Question 16

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

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)  decreased by $65 billionF) B) and E)
G) A) and C)

Question 17

By adding up the dollar value of all sales in the economy during a given year,we would:

Accepted Answer

A)  be determining the market value of all resources used in the production process
B)  be measuring GNI
C)  be determining value added for the economy
D)  be measuring GDP
E)  obtain a sum substantially larger than GDPF) B) and E)
G) A) and D)

Question 18

The growth of GDP may understate economic well-being if the:

Accepted Answer

A)  distribution of income becomes increasingly unequal
B)  quality of products and services improves
C)  environment deteriorates because of air pollution
D)  population increases
E)  amount of leisure decreasesF) A) and B)
G) C) and D)

Question 19

In 2010,the two countries with the top rankings using the Human Development Index were:

Accepted Answer

A)  Saudi Arabia and Denmark
B)  the United States and Japan
C)  Norway and Australia
D)  Sweden and Finland
E)  Canada and IcelandF) A) and B)
G) B) and E)

Exam 8: Measures of Economic Activity

Which of the following is an intermediate product?

Correct Answer
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In 2010,the two countries with the top rankings using the Human Development Index were:

Correct Answer
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The Human Development Index does not incorporate which of the following statistics?

Correct Answer
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"Value added" refers to:

Correct Answer
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In 1933,net investment was -$5.8 billion.This meant that:

Correct Answer
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Which of the following is not considered to be part of gross investment?

Correct Answer
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The growth of GDP may understate economic well-being if the:

Correct Answer
verified

By adding up the dollar value of all sales in the economy during a given year,we would:

Correct Answer
verified

Economists define investment to include:

Correct Answer
verified

Real GDP measures:

Correct Answer
verified

BGF Corporation buys $100 000 of sand,rock,and cement to produce ready-to-mix concrete.It sells 10 000 cubic meters of concrete at $30 per cubic meter.The value added by BGF Corporation is:

Correct Answer
verified

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

Correct Answer
verified

Which of the following best defines disposable income?

Correct Answer
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An economy is enlarging its stock of capital goods:

Correct Answer
verified

GDP can be calculated by adding:

Correct Answer
verified

If the size of the underground economy increases over time:

Correct Answer
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GDP includes:

Correct Answer
verified

Net exports may be defined as:

Correct Answer
verified

If Holmes pays Weiss $190,then:

Correct Answer
verified

Exam 8: Measures of Economic Activity

Which of the following is an intermediate product?

Correct AnswerverifiedShow Answer

In 2010,the two countries with the top rankings using the Human Development Index were:

Correct AnswerverifiedShow Answer

The Human Development Index does not incorporate which of the following statistics?

Correct AnswerverifiedShow Answer

"Value added" refers to:

Correct AnswerverifiedShow Answer

In 1933,net investment was -$5.8 billion.This meant that:

Correct AnswerverifiedShow Answer

Which of the following is not considered to be part of gross investment?

Correct AnswerverifiedShow Answer

The growth of GDP may understate economic well-being if the:

Correct AnswerverifiedShow Answer

By adding up the dollar value of all sales in the economy during a given year,we would:

Correct AnswerverifiedShow Answer

Economists define investment to include:

Correct AnswerverifiedShow Answer

Real GDP measures:

Correct AnswerverifiedShow Answer

BGF Corporation buys $100 000 of sand,rock,and cement to produce ready-to-mix concrete.It sells 10 000 cubic meters of concrete at $30 per cubic meter.The value added by BGF Corporation is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following best defines disposable income?

Correct AnswerverifiedShow Answer

An economy is enlarging its stock of capital goods:

Correct AnswerverifiedShow Answer

GDP can be calculated by adding:

Correct AnswerverifiedShow Answer

If the size of the underground economy increases over time:

Correct AnswerverifiedShow Answer

GDP includes:

Correct AnswerverifiedShow Answer

Net exports may be defined as:

Correct AnswerverifiedShow Answer

If Holmes pays Weiss $190,then:

Correct AnswerverifiedShow Answer

Correct Answer
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