Question 1

In the treatment of Canadian exports and imports,national income accountants:

Accepted Answer

In the calculation of GDP, exports are added to the economy's total production while imports are subtracted since they are not produced domestically. Therefore, national income accountants add exports and subtract imports when calculating GDP.

Question 2

-Refer to the above information.The gross domestic product is:

Accepted Answer

The answer of 
-Refer to the above information.The gross domestic...

Question 3

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

The answer of The following are national income account data...

Question 4

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

Accepted Answer

The answer of Refer to the information below.GDP is:
All figures...

Question 5

Refer to the information below.Net investment:
All figures are in billions.

Accepted Answer

The answer of Refer to the information below.Net investment:
All figures...

Question 6

The following are national income account data for a hypothetical economy in billions of dollars: government purchases ($940);personal consumption expenditures ($4,920);imports ($170);exports ($133);gross investment ($640).What is GDP in this economy?

Accepted Answer

GDP = C + I + G + (X-M)
GDP = 4,920 + 640 + 940 + (133-170)
GDP = 6,463 billion

Question 7

Refer to the information below.The gross domestic product is: All figures are in billions of dollars.

Accepted Answer

Based on the information given, the gross domestic product is stated as "All figures are in billions of dollars." Looking at the options provided, choice C is the only one that falls within this range, as $309 billion. The other options are either too high or too low.

Question 8

The value of Canadian imports is:

Accepted Answer

Imports do not entail production in Canada and therefore are subtracted from exports when calculating GDP.

Question 9

The following are national income account data for a hypothetical economy in billions of dollars: gross investment ($320);imports ($35);exports ($22);personal consumption expenditures ($2,460);and,government purchases ($470).What is GDP in this economy?

Accepted Answer

The answer of The following are national income account data...

Question 10

-Refer to the above information.Canadian imports:

Accepted Answer

The answer of 
-Refer to the above information.Canadian imports:
...

Question 11

A nation's capital stock was valued at $300 billion at the start of the year and $350 billion at the end.Consumption of private fixed capital in the year was $25 billion.Assuming stable prices,gross investment was:

Accepted Answer

Gross investment is the sum of all investments made during the year. It can be calculated by adding the change in the capital stock over the year to the consumption of fixed capital. In this case, the change in capital stock was $350 billion - $300 billion = $50 billion. Therefore, gross investment is $50 billion + $25 billion = $75 billion.

Question 12

In Year 1,inventories rose by $25 billion.In Year 2,inventories fell by $20 billion.In calculating total investment,national income accountants would have:

Accepted Answer

Inventories are a component of investment in national income accounting. Therefore, in Year 1, when inventories rose by $25 billion, total investment would have increased by the same amount. In Year 2, when inventories fell by $20 billion, total investment would have decreased by the same amount. Therefore, the correct answer is to increase total investment by $25 billion in Year 1 and decrease it by $20 billion in Year 2, which is choice D.

Question 13

Net exports are:

Accepted Answer

Net exports refer to the value of a country's exports minus the value of its imports. Therefore, choice C is the correct answer as it represents the definition of net exports.

Question 14

Net exports are a negative number when:

Accepted Answer

Net exports are calculated by subtracting imports from exports. When imports exceed exports, the result is a negative number, indicating a trade deficit and a negative contribution to a country's overall GDP. Therefore, option D is the correct choice.

Question 15

Gross domestic product (GDP)is equal to personal consumption expenditures:

Accepted Answer

GDP is calculated by adding up all the final goods and services produced within a country's borders during a given period of time. This includes personal consumption expenditures, gross investment (including business investment and residential investment), government spending, and net exports (exports minus imports). Therefore, choice D is correct as it includes all of these components.

Question 16

GDP in an economy is $4,600 billion.Consumer expenditures are $3,500 billion,government purchases are $900 billion,and gross investment is $400 billion.Net exports are:

Accepted Answer

GDP = C + I + G + NX
$4,600 billion = $3,500 billion + $400 billion + $900 billion + NX
$4,600 billion = $4,800 billion + NX
NX = -$200 billion (since net exports are the difference between exports and imports)

Question 17

Net exports are negative when:

Accepted Answer

Net exports are the difference between a nation's exports and imports. When imports exceed exports, net exports become negative. Therefore, option A is the correct answer.

Question 18

The smallest component of aggregate spending in Canada is:

Accepted Answer

Net exports (exports minus imports) make up a relatively small portion of Canada's aggregate spending compared to consumption, investment, and government purchases.

Question 19

In national income accounting,G stands for:

Accepted Answer

In national income accounting, G stands for government purchases, which includes all government expenditures on goods and services. This includes things like salaries of government employees, national defense spending, and infrastructure projects.

Question 20

GDP by the expenditure approach is equal to:

Accepted Answer

GDP by the expenditure approach is: C (personal consumption expenditures) + IS (gross private domestic investment) + G (government consumption expenditures and gross investment) + X (net exports) In the given options, only option A has all four components included with correct signs: C (personal consumption expenditures) I_g (gross private domestic investment) G (government consumption expenditures and gross investment) X_n (net exports) Therefore, the correct answer is A.

Quiz 7: Measuring the Economys Output