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ECO 1302A Mid-Term Exam Winter 2011

# ECO 1302A Mid-Term Exam Winter 2011 - 1INTRODUCTION TO...

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1INTRODUCTION TO MACROECONOMIC ISSUES ECO 1302A WINTER 2011 Professor Mario Seccareccia Thursday, February 17, 2011 DMS 10166 (613-562-5800 ext. 1691) LMX 112; 2:30 – 3:50 p.m. I. Multiple Choice Questions (40 percent) Please choose the most appropriate answer and enter it on the Scantron sheet. 1. An example of an abstraction used in macroeconomics is a. the price level. b . total costs. c. the tax rate. d . the Treasury bill rate. e. Wages, salaries and supplementary labour income. 2. If the prices of all goods and services rise during the year, a. real GDP may fall. b . nominal GDP must rise. c. nominal GDP may increase. d . real GDP must rise. 3. An Ottawa real estate salesperson sells a house in 2011 that was built in 2005. How does this transaction get counted in the GDP statistics? a. The price of the house and the real estate salesperson’s commission are both included in 2011’s GDP. b . Neither the price of the house or the commission is included in 2011’s GDP. c. The real estate salesperson’s commission but not the price of the house is included in 2011’s GDP. d . The price of the house would be included in both 2005’s GDP and the GDP for 2011. 4. If Honda (a Japan-based firm) produces a car in Alliston, Ontario, and exports it to Japan, in which country’s GDP will the car be counted? a. Japan’s, because Honda is a Japanese company. b . Japan’s because that is where the car is purchased. c. Canada’s GDP because that is where it was built. d . Both Canada and Japan. 1

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5. Which of the following would tend to increase the value of officially measured GDP? a. Decriminalization of drugs such as marijuana and cocaine. b . Decriminalization of prostitution. c. Decriminalization of gambling on basketball and football.
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