Question

1. Which of the following statements is most correct regarding Real GDP?

1. Real GDP measures changes to actual production by removing the effects of inflation
2. Real GDP measures impact of inflation on the Canadian economy
3. Real GDP measures the proportion of production increases attributed to inflation
4. Real GDP is an inferior measure of economic growth, compared to Current GDP

2. What is GDP if Canada’s government spending is $250 billion, exports are $115 billion, gross investment is $120 billion, imports are $90 billion, and consumption spending is $420 billion?

1. $575 billion
2. $765 billion
3. $815 billion
4. $995 billion

3. Which of the following statements about the Consumer Price Index (CPI) is incorrect?

1. Harmful goods, such as cigarettes and alcohol, are excluded from CPI calculations
2. The CPI indirectly measures the purchasing power of consumers’ incomes
3. The goods included in the CPI calculations are weighted based on their importance to a typical household
4. The CPI may not be accurate for households who purchase large amounts of luxury goods

4. Which type of unemployment is most likely to mirror the business cycle?

1. Inadequate-demand
2. Frictional
3. Structural
4. Seasonal

Use the following data to answer questions 5-7.

Year Price Output

2000 $35 120,000

2001 $45 128,000

2002 $55 135,000

2003 $60 142,000

Base Year = 2001

5. What is the price index for 2003? a) 100

b) 109

c) 133

d) 171

6. What is the current GDP for 2000? a) $120,000

b) $3,276,000

c) $4,200,000

d) $9,360,000

7. What is the real GDP for 2002? a) $6,075,000

b) $6,086,066

c) $7,425,000

d) $9,058,500

8. What is the major difference between GDP and GNP?

1. GDP measures all production in Canada, while GNP measures only production by Canadian firms abroad
2. GDP measures all production in Canada, while GNP measures all production by Canadian- owned anywhere
3. GDP measures only production by Canadian-owned firms in Canada and abroad, while GNP measures production in Canada only
4. GDP is a newer and more accurate measurement of economic activity than GNP

9. Which of the following items would be classified as a negative using the GPI measurement of economic growth?

1. Coal-burning power generation
2. Expansion of the public transit system
3. Government anti-tobacco campaign
4. All would be classified as negatives using the GPI

10. The Lorenz Curve illustrates the relationship between:

1. Inflation and unemployment
2. Real GDP and income level
3. Income level and income distribution
4. Unemployment and income distribution

11. A decrease in demand for imports would result in:

1. An rightward shift of the AD curve
2. A leftward shift of the AD curve
3. An rightward shift of the AS curve
4. A leftward shift of the AS curve

12. If the APC for a country’s economy was 1, then:

1. There will be no withdrawal from spending in the economy
2. There would be no savings in the economy
3. The MPS for the economy must also = 1
4. The economy does not place any value on spending money

13. Assume that you are given $2,800, your MPS is 0.4. How much of the $2,800 would you spend?

a) $420

b) $700

c) $1,680

d) $2,380

14. Which of the following factors would cause an AS curve to shift to the right?

1. An increase in savings
2. An increase in the amount of resources available
3. An increase in demand for imports
4. An increase in gross investment

15. The incidence of poverty in Canada is highest among which of the following groups?

1. Married couples with children
2. Single-parent families (female head)
3. Single-parent families (male head)
4. Elderly unattached females

16. A tax on cigarettes is an example of a:

1. Sales tax
2. Excise tax
3. Tariff
4. Custom duty

17. The benefits-received approach to taxation is difficult to implement because:

1. Some government programs have no benefits
2. The benefits from various government programs are difficult to measure
3. People who have to pay for services try not to use them
4. The government does not have a wide variety of taxes that they can impose on the public

18. A tax on personal income is an example of a:

1. Direct tax
2. Indirect tax

3. Excise tax
4. Both b) and c) are correct

19. “Equal treatment of equals” refers to which of the four tax principles?

1. Neutrality
2. Consistency
3. Equity
4. Efficiency

20. If an individual with a $20,000 income pays $5,000 in taxes, an individual with a $40,000 income pays $7,500 in taxes, and an individual with a $60,000 income pays $10,000 in taxes, then the tax system is:

1. Progressive
2. Regressive
3. Proportional
4. Equitable

21. If the country’s economy is experiencing a period of high unemployment, it is likely that the government will attempt to:

1. Raise taxes to combat unemployment, and inflation will rise as a result
2. Cut taxes to combat unemployment, and inflation will fall as a result
3. Increase spending to combat unemployment, and inflation will fall as a result
4. Increase spending to combat unemployment, and inflation will rise as a result

22. Which of the following factors did not contribute to Canada’s period of stagflation in the 1970’s?

1. Increases in global oil prices
2. Devaluation of the Canadian dollar
3. Higher wages for Canadian labour
4. Government deregulation in the energy industry

23. Which of the following fiscal policy stabilizers is automatic?

1. An increase in education spending to help with textbook shortage
2. A decrease in property taxes for seniors
3. Employment insurance premiums
4. All are examples of automatic stabilizers

24. Which of the following is not a lag associated with discretionary fiscal policy?

1. Recognition lag
2. Political lag
3. Decision lag
4. Implementation lag

25. Which of the following statements would a proponent of supply-side economics agree with?

1. Consumer spending is the factor that drives a country’s economy
2. It is possible to simultaneously improve both inflation and unemployment
3. It is impossible to simultaneously improve both inflation and unemployment
4. An increase in aggregate supply will always lead to an increase in the price level

26. The current size of the Canadian public debt is:

1. $200-299 billion
2. $300-399 billion
3. $400-499 billion
4. $500-599 billion

27. If a government introduces a mix of surplus and deficit budgets over their term in power, based on the economic conditions at the time of the budgets, then the government is following which type of budgeting?

1. Functional finance
2. Full-employment budgeting
3. Annually-balanced budgeting
4. Cyclically-balanced budgeting

28. Which of the following problems is not considered a negative effect of the public debt?

1. The government’s spending decisions are restricted due to the large amounts of spending on debt charges
2. Repayment of outstanding debt can only be made by borrowing more money from ourselves or by raising our own taxes
3. The size of the debt results in lower interest rates which causes investors to look to foreign- owned investments
4. The exponential growth of the debt results in massive interest payments

29. Which of the following stabilizers would not be associated with an expansionary fiscal policy?

1. An increase in government environmental regulations
2. An increase in pollution control spending
3. An increase in waste management spending
4. A decrease in taxes used to fund environmental education

30. A reduction in government regulation regarding timber conservation would have what type of impact on aggregate demand and aggregate supply?

1. A leftward shift of the AD curve
2. A rightward shift of the AD curve
3. A leftward shift of the AS curve
4. A rightward shift of the AS curve

Answer 1

Which of the following statements is most correct regarding Real GDP?

Real GDP measures changes to actual production by removing the effects of inflation

What is GDP if Canada’s government spending is $250 billion, exports are $115 billion, gross investment is $120 billion, imports are $90 billion, and consumption spending is $420 billion?

Y = C + I + G + (X - M) = 420 + 120 + 250 + 115 - 90 = 815

$815 billion

Which of the following statements about the Consumer Price Index (CPI) is incorrect?

Harmful goods, such as cigarettes and alcohol, are excluded from CPI calculations

Which type of unemployment is most likely to mirror the business cycle?

Inadequate-demand

Use the following data to answer questions 5-7.

Year Price Output

2000 $35 120,000

2001 $45 128,000

2002 $55 135,000

2003 $60 142,000

Base Year = 2001

What is the price index for 2003?

For 2003, using base year as 2001 Price index = 60/45*100 = 133.33

c) 133

What is the current GDP for 2000? 35*120000

c) $4,200,000

What is the real GDP for 2002? 45*135000

a) $6,075,000

What is the major difference between GDP and GNP?

GDP measures all production in Canada, while GNP measures all production by Canadian- owned anywhere

Which of the following items would be classified as a negative using the GPI measurement of economic growth?

All would be classified as negatives using the GPI

The Lorenz Curve illustrates the relationship between:

Income level and income distribution

A decrease in demand for imports would result in:

A leftward shift of the AD curve

If the APC for a country’s economy was 1, then: 100% of disposable income will be spent

There would be no savings in the economy

Assume that you are given $2,800, your MPS is 0.4. How much of the $2,800 would you spend?

2800*0.6

c) $1,680

Which of the following factors would cause an AS curve to shift to the right?

An increase in the amount of resources available

The incidence of poverty in Canada is highest among which of the following groups?

1. Married couples with children
2. Single-parent families (female head)
3. Single-parent families (male head)
4. Elderly unattached females

A tax on cigarettes is an example of a:

Excise tax

The benefits-received approach to taxation is difficult to implement because:

1. Some government programs have no benefits
2. The benefits from various government programs are difficult to measure
3. People who have to pay for services try not to use them
4. The government does not have a wide variety of taxes that they can impose on the public

A tax on personal income is an example of a:

1. Direct tax

“Equal treatment of equals” refers to which of the four tax principles?

Equity

If an individual with a $20,000 income pays $5,000 in taxes, an individual with a $40,000 income pays $7,500 in taxes, and an individual with a $60,000 income pays $10,000 in taxes, then the tax system is:

Regressive

If the country’s economy is experiencing a period of high unemployment, it is likely that the government will attempt to:

Increase spending to combat unemployment, and inflation will rise as a result

Which of the following factors did not contribute to Canada’s period of stagflation in the 1970’s?

1. Increases in global oil prices
2. Devaluation of the Canadian dollar
3. Higher wages for Canadian labour
4. Government deregulation in the energy industry

Which of the following fiscal policy stabilizers is automatic?

1. An increase in education spending to help with textbook shortage
2. A decrease in property taxes for seniors
3. Employment insurance premiums
4. All are examples of automatic stabilizers

Which of the following is not a lag associated with discretionary fiscal policy?

Political lag

Which of the following statements would a proponent of supply-side economics agree with?

1. Consumer spending is the factor that drives a country’s economy
2. It is possible to simultaneously improve both inflation and unemployment
3. It is impossible to simultaneously improve both inflation and unemployment
4. An increase in aggregate supply will always lead to an increase in the price level

The current size of the Canadian public debt is:

$500-599 billion

If a government introduces a mix of surplus and deficit budgets over their term in power, based on the economic conditions at the time of the budgets, then the government is following which type of budgeting?

Cyclically-balanced budgeting

Which of the following problems is not considered a negative effect of the public debt?

The size of the debt results in lower interest rates which causes investors to look to foreign- owned investments

Which of the following stabilizers would not be associated wth an expansionary fiscal policy?

An increase in government environmental regulations

A reduction in government regulation regarding timber conservation would have what type of impact on aggregate demand and aggregate supply?

A rightward shift of the AS curve

Please give a like, I solved as many as I could, it took a lot of effort and time. Thanks