Question 1

What are the two basic ways of deriving real GDP from nominal GDP?

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Question 2

When would a fixed based price index cause GDP growth to be overstated?

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Question 3

If Canada doubled its real GDP,it would be a much less liveable society than it is today.Explain this view.

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Question 4

The following table shows the price of a specific stereo receiver for a five-year period.Using Year 3 as the base year,calculate the price index for each year.

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Question 5

Identify at least four transactions and other variables,which are not included in the GDP.

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Question 6

The following data show nominal GDP and the appropriate price index for several years.Compute real GDP for each year and indicate whether you have "inflated" or "deflated" nominal GDP in finding real GDP.All GDP are in billions.

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Question 7

The expanding "underground" economy creates problems for economic policy makers.Explain.

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Question 8

Discuss the pros and cons of GDP as a measure of the economy's output performance and as a measure of its standard of living.

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Question 9

What is the relationship between real GDP,nominal GDP,and the price index?

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Quiz 7: Measuring the Economys Output