CH20 econ 101 Exam Questions with
Answers
1. 1.Suppose national accounting was done by adding up the market
values of all outputs of all firms. This approach would
A) underestimate the value of production in the economy.
B) accurately reflect the value of production in the economy.
C)obtain gross national product.
D) overestimate the value of production in the economy.
E)obtain gross domestic product. correct answer: D) overestimate the value of production
in the economy.
2. 2.In national-income accounting, ʺdouble countingʺ
A) means that consumption will always be less than GDP.
B)occurs when the value of output is counted more than once in the
calculation of national income.
C)means that pre-tax and after-tax GDP will be different.
D) occurs when the value of some output is omitted in the
calculation of national income.
E)leads to an underestimation of GDP in any given period. correct answer: B)
occurs when the value of output is counted more than once in the calculation of national
income.
3. 3) Suppose a Canadian firm imports $5000 worth of frisbees from
China and sells them for $10 000 after processing them. The effect on
GDP would be
A) to increase the value of GDP by $15 000.
,B) to increase the value of GDP by $10 000.
C)to decrease the value of GDP by $15 000.
, D) to increase the value of GDP by $5000.
E)No effect on GDP since the frisbees were produced outside of Canada.
correct answer: D) to increase the value of GDP by $5000.
4. 4) In Canada, the measurement of national income and national
product is conducted by
A) the Department of Finance.
B) the Bank of Canada.
C)Statistics Canada.
D) statisticians in universities.
E)the Treasury Board. correct answer: C) Statistics Canada.
5. 5) Which of the following statements about national-income
accounting is correct?
A)GDP on the expenditure side is calculated by adding up all the income
claims generated by the act of
production.
B)GDP on the income side is calculated by adding up total expenditure
for each of the main components of
final output.
C)The value of the expenditure on a nationʹs output is equal to the total
income claims generated by
producing that output.
D) GDP from the expenditure side and GDP from the income side differ
by the amount of investment in the
Answers
1. 1.Suppose national accounting was done by adding up the market
values of all outputs of all firms. This approach would
A) underestimate the value of production in the economy.
B) accurately reflect the value of production in the economy.
C)obtain gross national product.
D) overestimate the value of production in the economy.
E)obtain gross domestic product. correct answer: D) overestimate the value of production
in the economy.
2. 2.In national-income accounting, ʺdouble countingʺ
A) means that consumption will always be less than GDP.
B)occurs when the value of output is counted more than once in the
calculation of national income.
C)means that pre-tax and after-tax GDP will be different.
D) occurs when the value of some output is omitted in the
calculation of national income.
E)leads to an underestimation of GDP in any given period. correct answer: B)
occurs when the value of output is counted more than once in the calculation of national
income.
3. 3) Suppose a Canadian firm imports $5000 worth of frisbees from
China and sells them for $10 000 after processing them. The effect on
GDP would be
A) to increase the value of GDP by $15 000.
,B) to increase the value of GDP by $10 000.
C)to decrease the value of GDP by $15 000.
, D) to increase the value of GDP by $5000.
E)No effect on GDP since the frisbees were produced outside of Canada.
correct answer: D) to increase the value of GDP by $5000.
4. 4) In Canada, the measurement of national income and national
product is conducted by
A) the Department of Finance.
B) the Bank of Canada.
C)Statistics Canada.
D) statisticians in universities.
E)the Treasury Board. correct answer: C) Statistics Canada.
5. 5) Which of the following statements about national-income
accounting is correct?
A)GDP on the expenditure side is calculated by adding up all the income
claims generated by the act of
production.
B)GDP on the income side is calculated by adding up total expenditure
for each of the main components of
final output.
C)The value of the expenditure on a nationʹs output is equal to the total
income claims generated by
producing that output.
D) GDP from the expenditure side and GDP from the income side differ
by the amount of investment in the
