Question 1

The expenditure approach measures GDP by adding together

Accepted Answer

The answer of The expenditure approach measures GDP by adding...

Question 2

Table 20.2.1
Data From Eastland
 
-Refer to Table 20.2.1. From the information given in the table, the value of net domestic income at factor cost is

Accepted Answer

The answer of Table 20.2.1
Data From Eastland
 
-Refer to Table...

Question 3

Fact 20.1.2
Classify each of the following items as a final good or an intermediate good, and identify which is a component of consumption expenditure, investment, or government expenditure on goods and services:
Item 1. A DVD bought by a household
Item 2. A new airplane bought by WestJet
Item 3. Aluminum sheets bought by Boeing
Item 4. A new limousine for the prime minister
-Refer to Fact 20.1.2. Item 3 is ________ and item 4 is ________.

Accepted Answer

Item 3 (Aluminum sheets bought by Boeing) is an intermediate good because it will be used in the production process of airplanes (a final good). Item 4 (A new limousine for the prime minister) is a final good that is government expenditure because it is directly purchased by the government for official use. Items 1 and 2 are both final goods, but it is not specified which type of expenditure they are a component of, so they are not relevant to the question.

Question 4

A hypothetical economy produced four final goods during the year: plates, TVs, bicycles, and computers. Forty plates were produced and sold for $10 each. Five TVs were produced and sold for $300 each. Fifty bicycles were produced and sold for $100 each. Three computers were produced and sold for $750 each. With this information, one could determine

Accepted Answer

The answer of A hypothetical economy produced four final goods...

Question 5

Which of the following relationships is correct?

Accepted Answer

Gross investment refers to the total investment made in an economy, which includes both net investment (investment made in new capital goods) and depreciation (the value lost by existing capital goods over time). Therefore, Gross Investment = Net Investment + Depreciation. The other options do not reflect this relationship accurately.

Question 6

The firm that printed your textbook bought the paper from XYZ Paper Mills. This purchase of paper ________ part of GDP because the paper is ________ good.

Accepted Answer

The answer of The firm that printed your textbook bought...

Question 7

Which of the following are equal to one another?
I. aggregate production
II. aggregate expenditure
III. aggregate income

Accepted Answer

Aggregate production, expenditure, and income are all equal to one another in the national income accounting identity. This identity states that total production (I), total expenditure (II), and total income (III) are all equal. Therefore, choice E is the correct answer.

Question 8

In the circular flow diagram, aggregate expenditure includes

Accepted Answer

Aggregate expenditure includes consumption expenditure, investment (including private and public investment), government expenditure (including transfer payments), and net exports. Option D includes all these components. Option A is incorrect because it leaves out net exports. Option B and E are incorrect because taxes and saving are not part of aggregate expenditure.

Question 9

Table 20.2.1
Data From Eastland
 
-Refer to Table 20.2.1. From the data in the table, what additional data are needed to compute net domestic income at market prices?

Accepted Answer

The answer of Table 20.2.1
Data From Eastland
 
-Refer to Table...

Question 10

Table 20.2.1
Data From Eastland
 
-Refer to Table 20.2.1. From the information given in the table, the value of gross domestic product is

Accepted Answer

The answer of Table 20.2.1
Data From Eastland
 
-Refer to Table...

Question 11

The largest component of GDP using the expenditure approach is

Accepted Answer

Consumption expenditure is the largest component of GDP using the expenditure approach as it includes all spending by households on goods and services. Investment, exports, and government expenditure are also significant components, but they are typically smaller than consumption expenditure. Imports are subtracted from the other components to calculate GDP, so they are not a component in and of themselves.

Question 12

Suppose Mail Boxes Etc. buys a new copier for its store for $1,000. A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year the copier was used, ________ has occurred.

Accepted Answer

Depreciation refers to the decrease in value of an asset over time due to wear and tear, obsolescence, or other factors. In this scenario, the copier has lost $250 in value over the course of a year, which is an example of depreciation. The other options (B, C, D, E) are not relevant to this situation.

Question 13

Fact 20.1.3
The components and robots for Toyota auto assembly lines in Canada are built in Japan. Toyota assembles cars for the Canadian market in Ontario.
-Refer to Fact 20.1.3. Choose the correct statement.

Accepted Answer

Since the components and robots are built in Japan and brought into Canada, they would be considered imports and would appear as such in Canada's GDP calculation.

Question 14

Suppose the economy of Econoworld produces only two goods, kayaks and birdseed. In one year 20 kayaks are produced and sold for $1,000 each and 10 bags of birdseed are produced and sold for $30 each. The value of nominal GDP for this year is

Accepted Answer

Nominal GDP is calculated by adding up the total value of all goods and services produced in an economy in a given year. In this case, the value of kayaks produced is $20,000 (20 kayaks x $1,000 each) and the value of birdseed produced is $300 (10 bags x $30 each). Therefore, the nominal GDP for this year is $20,300.

Question 15

Table 20.2.1
Data From Eastland
 
-Refer to Table 20.2.1. From the data in the table, what is total income in Eastland?

Accepted Answer

To calculate total income in Eastland, we need to add up the income values for each category.

Total income for agriculture is 240. 
Total income for manufacturing is 460. 
Total income for service is 660.

Adding these values together gives us a total income of $1,360 in Eastland. Therefore, the best choice is C.

Question 16

Which one of the following would be included in the calculation of GDP by the expenditure approach?

Accepted Answer

The answer of Which one of the following would be...

Question 17

Table 20.2.2
 
-Refer to Table 20.2.2. Net domestic income at market prices equals

Accepted Answer

The answer of Table 20.2.2
 
-Refer to Table 20.2.2. Net...

Question 18

Fact 20.1.2
Classify each of the following items as a final good or an intermediate good, and identify which is a component of consumption expenditure, investment, or government expenditure on goods and services:
Item 1. A DVD bought by a household
Item 2. A new airplane bought by WestJet
Item 3. Aluminum sheets bought by Boeing
Item 4. A new limousine for the prime minister
-Refer to Fact 20.1.2. Item 1 is ________ and item 2 is ________.

Accepted Answer

The answer of Fact 20.1.2
Classify each of the following items...

Question 19

Table 20.2.2
 
-Refer to Table 20.2.2. Gross domestic product equals

Accepted Answer

The answer of Table 20.2.2
 
-Refer to Table 20.2.2. Gross...

Question 20

Fact 20.1.3
The components and robots for Toyota auto assembly lines in Canada are built in Japan. Toyota assembles cars for the Canadian market in Ontario.
-Refer to Fact 20.1.3. Choose the statement that is incorrect.

Accepted Answer

If any parts for the cars come from Japan, they are not recorded as a positive entry in calculating Canada's GDP, but rather as a negative entry in Canada's import expenditure.

Quiz 20: Measuring Gdp and Economic Growth

The expenditure approach measures GDP by adding together

Table 20.2.1 Data From Eastland -Refer to Table 20.2.1. From the information given in the table, the value of net domestic income at factor cost is

Which of the following relationships is correct?

The firm that printed your textbook bought the paper from XYZ Paper Mills. This purchase of paper part of GDP because the paper is good.

Which of the following are equal to one another? I. aggregate production II. aggregate expenditure III. aggregate income

In the circular flow diagram, aggregate expenditure includes

Table 20.2.1 Data From Eastland -Refer to Table 20.2.1. From the data in the table, what additional data are needed to compute net domestic income at market prices?

Table 20.2.1 Data From Eastland -Refer to Table 20.2.1. From the information given in the table, the value of gross domestic product is

The largest component of GDP using the expenditure approach is

Suppose Mail Boxes Etc. buys a new copier for its store for $1,000. A year later, when the firm wants to upgrade to a new copier, it finds that the old copier is only worth $750. Over the year the copier was used, ________ has occurred.

Fact 20.1.3 The components and robots for Toyota auto assembly lines in Canada are built in Japan. Toyota assembles cars for the Canadian market in Ontario. -Refer to Fact 20.1.3. Choose the correct statement.

Suppose the economy of Econoworld produces only two goods, kayaks and birdseed. In one year 20 kayaks are produced and sold for $1,000 each and 10 bags of birdseed are produced and sold for $30 each. The value of nominal GDP for this year is

Table 20.2.1 Data From Eastland -Refer to Table 20.2.1. From the data in the table, what is total income in Eastland?

Which one of the following would be included in the calculation of GDP by the expenditure approach?

Table 20.2.2 -Refer to Table 20.2.2. Net domestic income at market prices equals

Table 20.2.2 -Refer to Table 20.2.2. Gross domestic product equals

Fact 20.1.3 The components and robots for Toyota auto assembly lines in Canada are built in Japan. Toyota assembles cars for the Canadian market in Ontario. -Refer to Fact 20.1.3. Choose the statement that is incorrect.