Econ102 Midterm1-Ubc

University of British Columbia

Econ 102

Midterm 1

Spring 2014

This exam has 15 multiple choice questions in Part A and 4 short questions in Part B. Complete all the questions. Good luck.

Part A.

Multiple choice questions. Each question is worth 1 point.

1) Which of the following statements is true?

A) Final goods and services produced abroad by Canadians are part of Canadian GDP.

B) Final goods and services produced in Canada by foreigners are part of the foreign country's GNP.

C) Final goods and services produced in Canada by foreigners are part of Canada's GDP.

D) Both B and C are true.

E) None of the above are true.

2) Which one of the following is true?

A) Y = C + I + G + IM - X

B) I + G + X = Y + I + IM

C) Y = C + S + I

D) Y + IM = C + I + G

E) Y = C + I + G + X - IM

3) An art collector recently sold a piece of pottery for $300. He had purchased it for $200 two years earlier. How will the most recent sale affect GDP?

A) GDP will increase by $100.

B) GDP will not change.

C) GDP will increase by $300.

D) GDP will increase by $200.

E) GDP 2 years ago must be adjusted downwards by $200, and current GDP will rise by $300.

4) Suppose Angela falls in love with and subsequently marries her regularly employed housekeeper, Tony. What effect would this action have on GDP?

A) It would stay the same.

B) It would fall.

C) It would rise.

D) It would fall but then increase after the honeymoon was over.

E) It depends on whether he starts to work in the house free of charge or whether she still pays him.

5) Given that pollution is a by-product of some production processes,

A) GDP accountants adjust GDP downward.

B) GDP accountants adjust GDP upward.

C) GDP accountants do not adjust GDP unless pollution is a serious problem.

D) GDP tends to overstate economic well-being.

E) GDP tends to understate economic well-being.

6) Which one of the following people would be counted as unemployed in Canada?

A) Simone is currently working...