Question 1

If real GDP doubles and the GDP deflator doubles,what will happen to nominal GDP?

Accepted Answer

Nominal GDP is calculated by multiplying real GDP by the GDP deflator. If both double, the nominal GDP will quadruple (2 times 2 equals 4).

Question 2

In 2011,how large were Canadian government purchases of goods and services?

Accepted Answer

Canadian government purchases of goods and services are typically smaller than both consumption and investment.

Question 3

In Canada in 2011,what percentage of GDP was consumption?

Accepted Answer

In Canada in 2011, consumption accounted for 57 percent of GDP.

Question 4

Which of the following is included in Canadian GDP?

Accepted Answer

Canadian exports of goods and services are included in Canadian GDP as they represent the value of goods and services produced domestically that are sold abroad.

Answer: B 
 CPP/QPP payments are also included in Canadian GDP as they represent income earned by Canadians and contribute to national income.

Answer: C 
 The sale of used goods is not included in Canadian GDP as they are not part of the current production of goods and services in the economy.

Answer: D 
 Canadian imports of goods and services are not included in Canadian GDP as they represent goods and services produced in other countries and therefore do not contribute to the domestic production of goods and services.

Question 5

Which of the following examples would be included in Canadian consumption?

Accepted Answer

Canadian consumption refers to the purchase of goods and services by Canadian residents, regardless of where they are produced. Therefore, a Canadian resident buying a car manufactured in Brazil is an example of Canadian consumption.

Answer: C 
 Buying newly issued shares in a Canadian corporation is considered a form of investment rather than consumption. Therefore, this option is not an example of Canadian consumption.

Answer: D 
 Producing artwork to decorate a house does not involve any purchase or transaction, and therefore, it is not an example of consumption.

Question 6

What was Canadian GDP in 2011,approximately?

Accepted Answer

The answer of What was Canadian GDP in 2011,approximately?
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Question 7

In a given year,an economy has consumption of $4000,investment of $2000,government purchases of $1500,exports of $500,imports of $600,taxes of $1200,transfer payments of $400,and depreciation of $300.What is the GDP?

Accepted Answer

The answer of In a given year,an economy has consumption...

Question 8

Suppose an economy produces only wheat and rice.Last year,20 bushels of wheat are sold at $4 per bushel,and 10 bushels of rice are sold at $2 per bushel.If the price of wheat was $2 per bushel and the price of rice was $1 per bushel in the base year,what can we conclude?

Accepted Answer

Using the base year prices of $2 per bushel of wheat and $1 per bushel of rice, we can calculate the nominal GDP for last year as follows:
Nominal GDP = (20 bushels of wheat × $4 per bushel) + (10 bushels of rice × $2 per bushel) 
Nominal GDP = $80 + $20 
Nominal GDP = $100

To calculate real GDP, we use the base year prices and quantities:
Real GDP = (20 bushels of wheat × $2 per bushel) + (10 bushels of rice × $1 per bushel) 
Real GDP = $40 + $10 
Real GDP = $50

Finally, we can calculate the GDP deflator as the ratio of nominal GDP to real GDP multiplied by 100:
GDP deflator = (Nominal GDP / Real GDP) × 100 
GDP deflator = ($100 / $50) × 100 
GDP deflator = 200

Therefore, the correct choice is B.

Question 9

Which of the following best describes real GDP?

Accepted Answer

Real GDP measures the value of all goods and services produced in a given year, adjusted for inflation, by using the prices from a base year.

Question 10

Table 5-3
Consider the following table for the country of Ophir:
 $$\begin{array} { c c c } 
\text { Year } & \text { Naminal GDP } & \text { GDP Deflatar } \
2011 & \$ 4000 & 100 \
2012 & \$ 4100 & 105 \
2013 & 4200 & 110
\end{array}$$
-Refer to the Table 5-3.What can we conclude about real GDP from this information?

Accepted Answer

To find real GDP, divide nominal GDP by the GDP deflator (and multiply by 100). Calculating for each year: 2011: 4000/100 = 40, 2012: 4100/105 ≈ 39.05, 2013: 4200/110 ≈ 38.18. Real GDP decreases each year.

Question 11

What is the difference between nominal and real GDP?

Accepted Answer

Nominal GDP is calculated based on current prices, while real GDP adjusts for inflation by using a base year's prices. Therefore, nominal GDP does not reflect changes in price levels, while real GDP measures changes in output taking into account changes in prices.

Question 12

In 2011,what were Canadian net exports?

Accepted Answer

The answer of In 2011,what were Canadian net exports?
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Question 13

What was GDP per person in Canada in 2011,approximately?

Accepted Answer

The answer of What was GDP per person in Canada...

Question 14

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

Accepted Answer

The investment component of GDP includes purchases of new houses because it represents new construction and additions to the nation's housing stock. The purchases of previously owned homes and government bonds are not included in the investment component of GDP. While the purchases of new cars could be considered an investment for businesses that use them for transportation, it is more typically classified as a component of personal consumption expenditures.

Question 15

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

Accepted Answer

The answer of Which of the following is included in...

Question 16

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

Accepted Answer

The answer of Which of the following is included in...

Question 17

Which of the following examples will increase Canadian net exports?

Accepted Answer

When a resident of another country buys goods or services from Canada, it increases Canadian net exports. Option B, a U.S. resident buying a Blackberry manufactured in Canada, is the only example given that represents an increase in Canadian net exports.

Question 18

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

Accepted Answer

Nominal GDP is calculated by multiplying prices and quantity of goods and services produced. Therefore, a 1% increase in prices AND a 1% increase in output would result in a 2% increase in nominal GDP. Option A would result in a 2% decrease in nominal GDP (-1% x 3% = -3%; 0% - 3% = -3%). Option B would result in a 2% decrease in nominal GDP (-1% x 1% = -1%; 0% + (-1%) = -1%). Option D would result in a 4% increase in nominal GDP (3% x 1% = 3%; 0% + 3% = 3%), which is not among the given options.

Question 19

In 2011,how large were Canadian government purchases of goods and services?

Accepted Answer

According to the data from Statistics Canada, Canadian government purchases of goods and services were 21 percent of GDP in 2011.

Question 20

In 2011,what size was Canadian investment?

Accepted Answer

The answer of In 2011,what size was Canadian investment?
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Quiz 5: Measuring a Nation's Income

If real GDP doubles and the GDP deflator doubles,what will happen to nominal GDP?

In 2011,how large were Canadian government purchases of goods and services?

In Canada in 2011,what percentage of GDP was consumption?

Which of the following is included in Canadian GDP?

Which of the following examples would be included in Canadian consumption?

What was Canadian GDP in 2011,approximately?

In a given year,an economy has consumption of $4000,investment of $2000,government purchases of $1500,exports of $500,imports of $600,taxes of $1200,transfer payments of $400,and depreciation of $300.What is the GDP?

Suppose an economy produces only wheat and rice.Last year,20 bushels of wheat are sold at $4 per bushel,and 10 bushels of rice are sold at $2 per bushel.If the price of wheat was $2 per bushel and the price of rice was $1 per bushel in the base year,what can we conclude?

Which of the following best describes real GDP?

What is the difference between nominal and real GDP?

In 2011,what were Canadian net exports?

What was GDP per person in Canada in 2011,approximately?

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

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

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

Which of the following examples will increase Canadian net exports?

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

In 2011,how large were Canadian government purchases of goods and services?

In 2011,what size was Canadian investment?