Question 6(1 point)

With respect to GDP, how is unemployment compensation treated?

Question 6 options:

a)

It is included as part of GDP because it represents income.

b)

It is not included as part of GDP because it is a transfer payment.

c)

It is included as part of GDP because the recipients must have worked in the past to qualify.

d)

It is not included as part of GDP because the payments reduce business profits.

Question 7(1 point)

Which of the following is included in the investment component of Canadian GDP?

Question 7 options:

a)

purchases of Canadian stocks and bonds

b)

purchases of imported capital equipment

c)

purchases of new cars built in the U.S.

d)

purchases of new Canadian durable goods

Question 8(1 point)

What would be the cause of a 2% increase in nominal GDP?

Question 8 options:

a)

a 1% increase in prices of and a 3% decrease in output

b)

a 1% decrease in prices and a 1% increase in output

c)

a 1% increase in prices and a 1% increase in output

d)

a 3% increase in prices and a 1% increase in output

Question 9(1 point)

Suppose an economy produces only wheat and rice. Last year, 20 bushels of wheat are sold at $4 per bushel, and 10 bushels of rice are sold at $2 per bushel. If the price of wheat was $2 per bushel and the price of rice was $1 per bushel in the base year, what can we conclude?

Question 9 options:

a)

Nominal GDP is $100, real GDP is $50, and the GDP deflator is 50.

b)

Nominal GDP is $100, real GDP is $50, and the GDP deflator is 200.

c)

Nominal GDP is $50, real GDP is $100, and the GDP deflator is 200.

d)

Nominal GDP is $50, real GDP is $100, and the GDP deflator is 50.

Question 10(1 point)

How are nominal GDP and real GDP related?

Question 10 options:

a)

Nominal GDP measures base-year production using base-year prices, while real GDP measures current production using current prices.

b)

Nominal GDP measures current production using base-year prices, while real GDP measures current production using current prices.

c)

Nominal GDP measures current production using current prices, while real GDP measures current production using base-year prices.

d)

Nominal GDP measures current production using current prices, while real GDP measures base-year production using base-year prices.