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Commerce and BusinessbackBusinessbackPrinciples of EconomicsbackEconomicsbackPractice Set 2495back

The Measurement Of National Income

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Question 1
Free
Multiple Choice

Total value added in an economy is equal to the value of

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A

all final goods produced.

B

all final and intermediate goods produced.

C

all inputs and outputs in the economy.

D

all profits of all firms in the economy.

E

the sum of the value of primary,intermediate and final goods.

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Question 2
Free
Multiple Choice

Suppose national accounting was done by adding up the market values of all outputs of all firms.This approach would

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A

accurately reflect the value of production in the economy.

B

obtain gross domestic product.

C

obtain gross national product.

D

underestimate the value of production in the economy.

E

overestimate the value of production in the economy.

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Question 3
Free
Multiple Choice

In national-income accounting,"double counting"

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A

occurs when the value of some output is omitted in the calculation of national income.

B

means that pre-tax and after-tax GDP will be different.

C

occurs when the value of output is counted more than once in the calculation of national income.

D

means that consumption will always be less than GDP.

E

leads to an underestimation of GDP in any given period.

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Question 4
Free
Multiple Choice

All goods and services produced by one firm but used as inputs into a further stage of production are called

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A

value added.

B

intermediate goods.

C

national income goods.

D

final goods.

E

consumption goods.

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Question 5
Free
Multiple Choice

In national-income accounting,the value of intermediate products

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A

should always be counted as part of GDP in the expenditure approach.

B

should be subtracted from the value of final goods in determining a firm's total value added.

C

should be added to the value of other inputs in determining a firm's contribution to GDP.

D

must equal the value added by the firm.

E

is counted as factor income in the calculation of GDP from the income side.

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Question 6
Multiple Choice

When adding up the value of all goods produced in the economy,double counting can be avoided if only the ________ is included.

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A
value of final good and services
B
value of intermediate goods and services
C
cost of intermediate goods and services
D
revenue of all goods and services
E
revenue of intermediate goods and services
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Question 7
Multiple Choice

In Shoetown,a rancher takes $0 worth of inputs and produces animal skins,which he sells to the tanner for $400.The tanner then sells leather to the shoemaker for $700,and the shoemaker then sells $1200 worth of shoes.The value added from these transactions is

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A
$800.
B
$1000.
C
$1200.
D
$2300.
E
$2500.
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Question 8
Multiple Choice

In Shoetown,a rancher takes $0 worth of inputs and produces animal skins,which he sells to the tanner for $400.The tanner then sells leather to the shoemaker for $700,and the shoemaker then sells $1200 worth of shoes.The value added by the tanner is

Choose correct answer/s
A
$0.
B
$300.
C
$400.
D
$500.
E
$1200.
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Question 9
Multiple Choice

Suppose a Canadian firm imports $5000 worth of frisbees from China and sells them for $10 000.The effect on GDP would be

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A
to decrease the value of GDP by $15 000.
B
to increase the value of GDP by $15 000.
C
to increase the value of GDP by $10 000.
D
to increase the value of GDP by $5000.
E
No effect on GDP since the frisbees were produced outside of Canada.
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Question 10
Multiple Choice

A farmer raises free-range chickens,which he sells to a company for $1000.That company sells the "processed" chickens to a grocery store for $1600,which in turn produces roasted chickens which are sold to the public for $2400.Based on this information,the value of total output is equal to

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A
$1400.
B
$1600.
C
$2400.
D
$4000.
E
$5000.
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Question 11
Multiple Choice

In Canada,the measurement of national income and national product is conducted by

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A
the Department of Finance.
B
the Bank of Canada.
C
the Treasury Board.
D
statisticians in universities.
E
Statistics Canada.
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Question 12
Multiple Choice

Which of the following statements about national-income accounting is correct?

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A
The total value added in the economy is equal to the sum of all components in the circular flow of expenditure and income.
B
The value of the expenditure on a nation's output is equal to the total income claims generated by producing that output.
C
GDP on the expenditure side is calculated by adding up all the income claims generated by the act of production.
D
GDP on the income side is calculated by adding up total expenditure for each of the main components of final output.
E
GDP from the expenditure side and GDP from the income side differ by the amount of investment in the economy.
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Question 13
Multiple Choice

In Lumberville,the lumberjack cuts trees and sells them to the local mill for $500.The local mill processes these trees into wood planks and sells them to the carpenter for $800.Finally,the carpenter uses these wood planks to make tables which he sells for $1400 to Lumberville's residents.If we allowed double counting,the total value of Lumberville's output would be calculated as ________ .But if we correctly compute the total value added,the value of the total output in Lumberville would be ________ .

Choose correct answer/s
A
$1400; $1400
B
$2200; $2700
C
$2200; $4200
D
$2700; $1400
E
$4200; $2700
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Question 14
Multiple Choice

The "value added" for an individual firm can be calculated by

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A
adding the cost of the intermediate goods used by the firm.
B
subtracting the payments made to the factors of production used by the firm from the firm's revenue.
C
calculating the revenue generated by the firm.
D
calculating the profit generated by the firm.
E
adding up the payments made to the factors of production used by the firm.
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Question 15
Multiple Choice

Jodie's Bakery generates a yearly revenue of $6000.Throughout the year Jodie spends $1500 on flour,$1000 on fruit,$500 on sugar & spices,$1500 on butter,and employs an assistant whom she pays $1000.Calculate the value of the annual output produced by Jodie's Bakery using the value added method.

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A
$1000
B
$1500
C
$4500
D
$5000
E
$6000
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Question 16
Multiple Choice

Consider the circular flow of expenditure and income in the Canadian economy.Which of the following is an injection into the circular flow?

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A
imports
B
taxes
C
saving
D
consumption
E
investment
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Question 17
Multiple Choice

Consider the circular flow of expenditure and income in the Canadian economy.Which of the following is an injection into the circular flow?

Choose correct answer/s
A
Bombardier imports machine parts from Germany.
B
Bombardier exports subway cars to Mexico.
C
Loblaws pays corporate income tax to the federal government.
D
You put $500 into your TFSA (tax-free savings account).
E
You make an online purchase from a U.S.retailer.
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Question 18
Multiple Choice

Consider the circular flow of expenditure and income in the Canadian economy.Which of the following is an injection into the circular flow?

Choose correct answer/s
A
Loblaws imports cheese from Switzerland.
B
You pay GST on your purchases.
C
You contribute to your company pension plan.
D
A Toyota plant in Canada imports car parts from Japan.
E
The Government of Canada purchases new Coast Guard ships.
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Question 19
Multiple Choice

Consider the circular flow of income and expenditure in the Canadian economy.Which of the following is a withdrawal from the circular flow?

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A
investment
B
consumption
C
saving
D
exports
E
government purchases
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Question 20
Multiple Choice

Consider the circular flow of income and expenditure in the Canadian economy.Which of the following is a withdrawal from the circular flow?

Choose correct answer/s
A
Your family buys weekly groceries.
B
Bombardier exports subway cars to Mexico.
C
You put $500 into your TFSA (tax-free savings account).
D
The B.C.provincial government builds a new hospital.
E
Canadian farmers sell wheat to China.
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