Macroeconomics Canadian 14th Edition Mcconnell Test Bank Full Chapter PDF

Macroeconomics Canadian 14th Edition
Mcconnell Test Bank

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MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1) A nation's gross domestic product (GDP):

A) is the dollar value of the total output produced within the borders of the nation.
B) is always some amount less than its C + I g + G + Xn .
C) can be found by summing C + In + S + Xn .
D) is the dollar value of the total output produced by its citizens, regardless of where they are
living.
Answer: A
2) The GDP is the:

A) monetary value of all economic resources used in producing a year's output.
B) national income minus all non-income charges against output.
C) monetary value of all goods and services, final and intermediate, produced in a specific year.
D) monetary value of all final goods and services produced within a nation in a particular year.
Answer: D
3) Suppose the total market value of all final goods and services produced in a particular country in
2000 is $600 billion and the total market value of final goods and services sold is $525 billion. We
can conclude that:
A) NDI in 2000 is $525 billion. B) GDP in 2000 is $525 billion.
C) GDP in 2000 is $600 billion. D) inventories in 2000 fell by $75 billion.
Answer: C
4) Gross domestic product (GDP) measures and reports output:

A) as an index number.
B) in quantities of physical units (for example, kilos, litres, and bushels).
C) in percentage terms.
D) in dollar amounts.
Answer: D
5) GDP may be defined as:

A) the economic value of all economic resources used in the production of a year's output.
B) total resource income less taxes, saving, and spending on exports.
C) the market value of all final goods and services produced within country in a specific year.
D) the monetary value of all goods and services (final, intermediate, and non-market) produced in
a given year.
Answer: C
6) GDP is the total market value of:

A) all expenditures on consumption, investment, and net exports in an economy in a given year.
B) all intermediate goods and services produced in an economy in a given year.
C) all expenditures on natural resources, labor, and capital goods in an economy in a given year.
D) all final goods and services produced in an economy in a given year.
Answer: D
1
7) National income accountants can avoid multiple counting by:
A) only counting intermediate goods.
B) only counting final goods.
C) counting both intermediate and final goods.
D) including transfers in their calculations.
Answer: B
8) By summing the dollar value of all market transactions in the economy we would:
A) obtain a sum substantially larger than the GDP.
B) be determining value added for the economy.
C) be measuring GDP.
D) be determining the market value of all resources used in the production process.
Answer: A
9) The term "final goods and services" refers to:

A) goods and services which are unsold and therefore added to inventories.
B) goods and services purchased by ultimate users, as opposed to resale or further processing.
C) goods and services whose value has been adjusted for changes in the price level.
D) the excess of Canadians exports over Canadians imports.
Answer: B
10) GDP includes:

A) both intermediate and final goods. B) neither intermediate nor final goods.
C) final, but not intermediate, goods. D) intermediate, but not final, goods.
Answer: C
11) Which is included in GDP?

A) bread for a restaurant B)transfer payments
C) telephone service for a home D) used autos purchased by consumers
Answer: C
12) An example of a final good in national income accounts would be new:

A) trees purchasedby Wendy Lee's Garden Center.
B) chemicals purchased by Green Grass Lawn Care.
C) lawn mowers purchased by Cut-rite Mowers.
D) flowers purchased by homeowner Lenny Davis.
Answer: D
13) Which of the following is a final good or service?

A) fertilizer purchased by a farm supplier
B) diesel fuel bought for a delivery truck
C) Chevrolet windows purchased by a General Motors assembly plant
D) a haircut
Answer: D
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14) An example of an intermediate good or service would be:
A) a desk bought by an accountant for her office.
B) sacks of groceries bought by a dentist for his family.
C) a car bought by a household for commuting to work.
D) bricks bought by a homeowner for constructing a patio.
Answer: A
15) Which of the following is an intermediate good?

A) the purchase of a pizza by a college or university student
B) the purchase of gasoline for a ski trip to B.C.
C) the purchase of jogging shoes by a professor
D) the purchase of baseball bats by a professional baseball team
Answer: D
16) If all the final goods and intermediate goods and services were included in GDP:
A) the GDP would then have to be deflated for changes in the price level.
B) the GDP would be understated.
C) nominal GDP would exceed real GDP.
D) the GDP would be overstated.
Answer: D
17) A business buys $5,000 worth of resources to produce a product. The business makes 100 units of
the product and each of them sells for $65. The value added by the business to these products is:
A) $5,000 B) $1,000 C) $6,500 D) $1,500
Answer: D
18) Subtracting the purchase of intermediate products from the value of the sales of final products
determines the amount of:
A) surplus or deficit from the economic activity.
B) profit and cost.
C) net investment for a business.
D) value added from the economic activity.
Answer: D
19) Value added refers to:

A) any increase in GDP which has been adjusted for adverse environmental effects.
B) the portion of any increase in GDP which is caused by inflation as opposed to an increase in
real output.
C) the difference between the value of a firm's output and the value of the inputs it has purchased
from others.
D) the excess of gross investment over net investment.
Answer: C
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20) Assume a manufacturer of stereo speakers purchases $40 worth of components for each speaker.
The completed speaker sells for $70. The value added by the manufacturer for each speaker is:
A) $40 B) $70 C) $110 D) $30
Answer: D
21) SetupCorporation buys $100,000 of sand, rock, and cement to produce ready-mix concrete. It sells
10,000 cubic yards of concrete at $30 a cubic yard. The value added by Setup Corporation is:
A) $100,000 B) $300,000 C) $200,000 D) zero dollars.
Answer: C
22) By summing the values added at each stage in the production of some good we obtain:
A) the total cost (including profits) of that product.
B) the total income generated by that good's production.
C) the price of that good.
D) all of the above.
Answer: D
23) Value added is the value of a firm's output minus:

A) the value of intermediate goods purchased from other firms.
B) the value of its capital goods.
C) the compensation it pays to employees.
D) its depreciation.
Answer: A
24) Abusiness buys $7,000 worth of resources to produce a product. The business makes 150 units of
the product and each of them sells for $90. The value added by the business to these products is:
A) $6,850 B) $6,500 C) $7,000 D) $13,500
Answer: B
25) The value added by firms A-E from the production of the product described below is:
A) $6,500 B) $10,300 C) $3,000 D) $3,800

Answer: D
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26) Subtracting thepurchase of intermediate products from the value of the sales of final products
determines the amount of:
A) profit and cost.
B) net investment for a business.
C) value added from the economic activity.
D) surplus or deficit from the economic activity.
Answer: C
27) A distinguishing characteristic of public transfer payments is that:

A) the recipients make no contribution to current production in return for them.
B) they are used to subsidize the major transportation carriers to reduce transportation costs.
C) they are counted as part of government purchases in the calculation of the gross domestic
product.
D) there is a tax on the amount of the subsidy above a certain income level.
Answer: A
28) Suppose Smith pays $100 to Jones.

A) We can say with certainty that the GDP has increased, but we cannot determine the amount.
B) We can say with certainty that the GDP has increased by $100.
C) We can say with certainty that the nominal GDP has increased, but we can't say whether real
GDP has increased or decreased.
D) We need more information to determine whether GDP has changed.
Answer: D
29) Tom Atoe grows tomatoes for home consumption. This activity is:
A) excluded from GDP in order to avoid double counting.
B) excluded from GDP because an intermediate good is involved.
C) included in GDP because it reflects production.
D) productive but is excluded from GDP because no market transaction occurs.
Answer: D
30) In calculating GDP, governmental transfer payments, such as welfare payments, are:
A) counted as consumption spending. B) not counted.
C) counted as government spending. D) counted as investment spending.
Answer: B
31) Transfer payments are:

A) included when calculating GDP because they are a category of investment spending.
B) excluded when calculating GDP because they only reflect inflation.
C) included when calculating GDP because they increase the spending of recipients.
D) excluded when calculating GDP because they do not reflect current production.
Answer: D
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32) GDP excludes expenditures by:
A) businesses on pollution control equipment. B)government on military hardware.
C) business for travel and entertainment. D) consumers on used automobiles.
Answer: D
33) In calculating GDP by the income approach, we should sum up:

A) wages, consumption, investment and rent.
B) wages, interest, investment, and exports.
C) wages, rent, interest and profit income.
D) wages, profit income, investment, and consumption.
Answer: C
34) In calculating GDP by the expenditure approach, we sum up:

A) investment, government purchases, consumption, and net exports.
B) consumption, investment, government purchases, and imports.
C) consumption, investment, government purchases, exports, and imports.
D) consumption, investment, wages, and rents.
Answer: A
35) A nation's gross domestic product (GDP) by the expenditure approach:

A) is the dollar value of the total output produced by its citizens, regardless of where they are
living.
B) is always some amount less than its NDI.
C) can be found by summing C + Ig + G + Xn .
D) can be found by summing C + S + G + Xn .
Answer: C
36) The largest component of total expenditures in Canada is:

A) gross investment. B) government purchases.
C) consumption. D) net exports.
Answer: C
37) Which of the following do national income accountants consider to be "investment"?

A) the purchase of gold coins
B) the purchase of corporate bonds
C) the purchase of a new house
D) the purchase of an automobile for private, non-business use
Answer: C
38) As defined in national income accounting, investment includes:

A) imports, but not exports.
B) all consumption.
C) business expenditures on machinery and equipment.
D) all nonfood items.
Answer: C
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39) Economists define investment to include:
A) any increase in business inventories.
B) the addition of cash to a savings account.
C) the purchase of any durable good, for example, an automobile or a refrigerator.
D) the purchase of common or preferred stock.
Answer: A
40) Which of the following is not an economic investment?

A) the piling up of inventories on a grocer's shelf
B) the purchase of 100 shares of Bell Canada by a retired business executive
C) construction of a suburban housing project
D) the purchase of a drill press by the Ajax Manufacturing Company
Answer: B
41) If the economy adds to its inventory of goods during 2012:

A) this amount should be included in calculating 2012's GDP.
B) this amount should be subtracted in calculating 2012's GDP.
C) this amount should be ignored in calculating 2012's GDP.
D) gross investment will exceed net investment by the amount of the inventory increase.
Answer: A
42) In calculating GDP, national income accountants:

A) ignore inventories because they do not represent final goods.
B) add increases in inventories and subtract decreases in inventories.
C) treat inventory changes as an adjustment to personal consumption expenditures.
D) subtract increases in inventories and add decreases in inventories.
Answer: B
43) The ZZZ Corporation issued $25 million in new common stock in 2012. It used $18 million of the
proceeds to replace obsolete equipment in its factory and $7 million to repay bank loans. As a result,
investment:
A) of $18 million has occurred. B) of $25 million has occurred.
C) of $7 million has occurred. D) has not occurred.
Answer: A
44) In2011 Trailblazer Bicycle Company produced a mountain bike which was delivered to a retail
outlet in November of 1998. The bicycle was sold to E.Z. Ryder in March of 2012. This bicycle is
counted as:
A) consumption in 2011 and as disinvestment in 2012.
B) disinvestment in 2011 and as consumption in 2012.
C) investment in 2011 and as disinvestment in 2012.
D) disinvestment in 2011 and as investment in 2012.
Answer: C
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45) If depreciation exceeds gross investment:
A) the economy's stock of capital is growing.
B) net investment is zero.
C) the economy's stock of capital is shrinking.
D) the economy's stock of capital may be either growing or shrinking.
Answer: C
46) Net investment refers to:

A) gross domestic investment less net exports.
B) gross investment less consumption of fixed capital.
C) the amount of machinery and equipment used up in producing GDP in a specific year.
D) the difference between the market value and book value of outstanding capital stock.
Answer: B
47) If depreciation (consumption of fixed capital) exceeds gross investment, it can be concluded that:
A) nominal GDP is rising but real GDP is declining.
B) net investment is negative.
C) the economy is expanding.
D) the economy is importing more than it exports.
Answer: B
48) When an economy's production capacity is expanding:

A) gross investment exceeds depreciation.
B) nominal GDP, but not necessarily real GDP, is rising.
C) disposable income exceeds personal income.
D) net exports is always a positive amount.
Answer: A
49) Refer to the above information. Negative net investment is occurring in:
A) economy A only. B) economy B only.
C) economy C only. D) economies A and B only.
Answer: B
50) Other things equal, the above information suggests that the production capacity in economy:
A) A is growing more rapidly than either B or C.
B) C is growing more rapidly than economy B.
C) B is growing more rapidly than either A or C.
D) A is growing less rapidly than economy B.
Answer: B
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51) In 1933 net investment was minus $208 million. This meant that:
A) gross investment exceeded depreciation by $208 million.
B) the production of 1933's GDP used up more capital goods than were produced in that year.
C) the economy produced no capital goods at all in 1933.
D) the economy was expanding in that year.
Answer: B
52) An economy is enlarging its stock of capital goods:

A) when net investment exceeds gross investment.
B) when replacement investment exceeds gross investment.
C) when gross investment exceeds replacement investment.
D) whenever gross investment is positive.
Answer: C
53) A nation's stock of capital goods will decline when:

A) depreciation exceeds gross investment.
B) gross investment exceeds depreciation.
C) gross investment exceeds net investment.
D) net investment is positive, but less than gross investment.
Answer: A
54) In an economy experiencing a declining production capacity:

A) net exports are necessarily zero.
B) Net Investment exceeds GDP.
C) the nation's stock of capital goods is expanding.
D) depreciation exceeds gross investment.
Answer: D
55) Ifin some year gross investment was $120 billion and net investment was $65 billion, then in that
year the country's capital stock:
A) increased by $55 billion. B) increased by $65 billion.
C) may have either increased or decreased. D) decreased by $55 billion.
Answer: B
56) Money spent on the purchase of a new house is included in the GDP as a part of:
A) personalsaving. B) personal consumption expenditures.
C) investment. D) the consumption of private fixed capital.
Answer: C
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57) InNovember 2012, General Motors produced an automobile that was delivered to a local dealership
in December 2012. The auto was sold to Sharon Smith for personal use in February of 2013.
Following national income accounting practices, this auto would be counted as:
A) disinvestment in 2012 and consumption in 2013.
B) investment in 2012 and disinvestment in 2013.
C) consumption in 2012 and consumption in 2012.
D) consumption in 2012 and investment in 2013.
Answer: B
58) Which would be considered an investment according to economists?

A) the buying of shares of Janus mutual funds B) the purchase of a new machinery by Ford
C) the selling of IBM corporate bonds D) the purchase of stock of MacDonald's
Answer: B
59) Which would be considered an investment according to economists?

A) the purchase of newly-issued shares of stock in Microsoft
B) the purchase of shares of stock by Fidelity, a mutual fund company
C) the sale of government bonds by the nation's central bank
D) the construction of a new computer chip factory by Intel
Answer: D
60) Gross investment refers to:

A) net investment plus replacement investment.
B) private investment minus public investment.
C) net investment plus net exports.
D) net investment after it has been "inflated" for changes in the price level.
Answer: A
61) From an economist's perspective, which is not considered to be an investment?

A) additions to inventories at steel plants B) purchase of shares of company stock
C) the building of an apartment complex D) construction of a new factory
Answer: B
62) Inan economy, the value of inventories rose from $100 billion in 2012 to $150 billion in 2013. In
calculating total investment for 2013, national income accountants would:
A) decrease it by $50 billion. B) increase it by $150 billion.
C) decrease it by $100 billion. D) increase it by $50 billion.
Answer: D
63) Inan economy, the value of inventories fell from $75 billion in 2012 to $63 billion in 2013. In
calculating total investment for 2013, national income accountants would:
A) decrease it by $75 billion. B) decrease it by $12 billion.
C) increase it by $138 billion. D) increase it by $63 billion.
Answer: B
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64) InYear 1, inventories rose by $25 billion. In Year 2, inventories fell by $20 billion. In calculating
total investment, national income accountants would have:
A) increased it by $25 billion in Year 1 and decreased it by $5 billion in Year 2.
B) decreased it by $25 billion in Year 1 and increased it by $20 billion in Year 2.
C) increased it by $25 billion in Year 1 and decreased it by $20 billion in Year 2.
D) decreased it by $25 billion in Year 1 and increased it by $5 billion in Year 2.
Answer: C
65) Anation's capital stock was valued at $300 billion at the start of the year and $350 billion at the end.
Consumption of private fixed capital in the year was $25 billion. Assuming stable prices, gross
investment was:
A) $75 billion. B) $90 billion. C) $50 billion. D) $25 billion.
Answer: A
66) Refer to the information below. Net investment:
All figures are in billions.
A) cannot be determined from the data given. B) is $72.

C) is $45. D) is $53.
Answer: C
67) In national income accounting, G stands for:

A) gross saving. B) gross investment.
C) government transfer payments. D) government purchases.
Answer: D
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68) Net exports are a negative number when:
A) a nation's imports of goods and services rise.
B) a nation's imports of goods and services fall.
C) a nation's exports of goods and services are greater than its imports.
D) a nation's imports of goods and services are greater than its exports.
Answer: D
69) Net exports are:

A) exports plus imports.
B) imports less exports.
C) that portion of consumption and investment goods sent to other countries.
D) exports less imports.
Answer: D
70) Net exports are negative when:

A) the economy's stock of capital goods is declining.
B) a nation's exports exceed its imports.
C) a nation's imports exceed its exports.
D) depreciation exceeds domestic investment.
Answer: C
71) The smallest component of aggregate spending in Canada is:

A) government purchases. B) investment.
C) consumption. D) net exports.
Answer: D
72) The value of Canadian imports is:

A) added when calculating GDP because imports do not entail production in Canada.
B) subtracted from exports when calculating GDP because imports do not entail production in
Canada.
C) subtracted from exports when calculating GDP because imports do not entail spending by
Canadians.
D) added to exports when calculating GDP because imports reflect spending by Canadians.
Answer: B
73) In the treatment of Canadian exports and imports, national income accountants:
A) add exports, but subtract imports, in calculating GDP.
B) add both exports and imports in calculating GDP.
C) subtract exports, but add imports, in calculating GDP.
D) subtract both exports and imports in calculating GDP.
Answer: A
12
74) Refer tothe above information. Canadian imports:
A) are $26. B)are $11.
C) are $16. D) cannot be calculated
Answer: B
75) Refer to the above information. The gross domestic product is:
A) $402 B) $382 C) $328 D) $336
Answer: D
76) Grossdomestic product (GDP) is equal to personal consumption expenditures:

A) plus gross investment, minus government spending, and plus net exports.
B) plus gross investment, plus government spending, and minus net exports.
C) plus gross investment, plus government spending, and plus net exports.
D) minus gross investment, plus government spending, and plus net exports.
Answer: C
77) Thefollowing are national income account data for a hypothetical economy in billions of dollars:
gross investment ($320); imports ($35); exports ($22); personal consumption expenditures ($2,460);
and, government purchases ($470). What is GDP in this economy?
A) $3,290 billion B) $3,237 billion C) $3,273 billion D) $3,263 billion
Answer: B
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government purchases ($940); personal consumption expenditures ($4,920); imports ($170); exports
($133); gross investment ($640). What is GDP in this economy?
Answer: A
government purchases ($1,050); personal consumption expenditures ($4,800); imports ($370);
exports ($240); gross investment ($1,130). Personal consumption expenditures are approximately
what percentage of this economy?
A) 75 percent B) 70 percent C) 65 percent D) 60 percent
Answer: B
80) Refer to the information below. GDP is:
All figures are in billions of dollars.
A) $402 B) $417 C) $467 D) $422

Answer: D
81) GDP by the expenditure approach is equal to:

A) C + In + G + Xn . B) C + Ig + G - Xn . C) C + In + G - Xn. D) C + I g + G + Xn .
Answer: D
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82) Refer to the information below. The gross domestic product is: All figures are in billions of dollars.
A) $282 B) $300 C) $309 D) $326

Answer: C
83) GDP in an economy is $4,600 billion. Consumer expenditures are $3,500 billion, government
purchases are $900 billion, and gross investment is $400 billion. Net exports are:
A) +$200 billion. B) +$400 billion. C) -$400 billion. D) -$200 billion.
Answer: D
15
84) Refer to the information below. The gross domestic product for this economy is: All figures are in billions.
A) $609 B) $592 C) $584 D) $636

Answer: D
85) Wages, salaries, and supplementary labour income in Canada:

A) is the only category in the calculation of the GDP by the income approach.
B) is the smallest category in the calculation of the GDP by the income approach.
C) is about 30% of the income categories.
D) is the largest category in the calculation of the GDP by the income approach.
Answer: D
86) If we add up the figures for wages, rent, interest and profit:
A) we obtain a figure which is equal to the GDP by the expenditure approach.
B) the figure is not equal to the GDP by the expenditure approach because the Canadian national
accounts do not reflect each of these four factors of income and also because a few adjustments
are necessary.
C) the figure is not equal to the GDP by the expenditure approach because it does not include the
amount of investment.
D) it does not reflect the actual figure for the GDP by the expenditure approach because it does not
include the amount of consumption.
Answer: B
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87) Profitsof private corporations are divided into:
A) supplementary labour income, dividends, and distributed corporate profits.
B) corporate income taxes, dividends and undistributed corporate profits.
C) dividends, distributed and undistributed corporate profits.
D) corporate income taxes, investment and distributed corporate profits.
Answer: B
88) Interestand investment income includes:

A) interest on bonds and loans of money capital and rental income received by households and
inputted rent.
B) Interest paid to the households for their investment.
C) retained earnings.
D) taxes which are levied on the corporations' net earnings.
Answer: A
89) Net income from farms and unincorporated businesses is defined as:
A) the earnings of investment of corporate businesses.
B) the earnings of farmers and proprietors from their own businesses.
C) the earnings of government received from farmers.
D) the earnings of corporate stock holders.
Answer: B
90) Net Domestic Income at the factor cost refers to the:

A) total income earned by foreign-supplied factors of production as wages, interest, rent and profit
total income earned by foreign-supplied and Canadian-supplied factors of
B) total income earned by Canadian-supplied factors of production as wages, interest, rent and
profit.
C) total income earned by Canadian households.
D) production as wages, interest, rent and profit.
Answer: B
91) TheGDP figure by the income approach will be identical to the GDP by the expenditure approach if
we add to the Net Domestic income:
A) profits of the corporations and the capital consumption allowances.
B) the indirect taxes and the capital consumption allowances.
C) the capital consumption allowances and the investment income.
D) the capital consumption allowances and the interest payments to the owners of capital.
Answer: B
17
92) Refer to the information below. The capital consumption allowance:
A) cannot be calculated. B)is $32.

C) is $14. D) is $23.
Answer: D
18
93) Refer to the information below. Personal income is:
A) $202 B) $184 C) $228 D) $221

Answer: C
94) Transfer payments are included in:

A) G B) PI. C) GNP. D) GDP.
Answer: B
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95) Refer to the data below. Personal income:
A) is $274. B) is $253. C) is $229. D) is $243.

Answer: D
96) Which of the following best defines disposable income?

A) all income earned by resource suppliers for their current contributions to production
B) the market value of the annual output net of consumption of fixed capital
C) income received by households less personal taxes
D) the before-tax income received by households
Answer: C
97) Which of the following is the smallest in terms of dollar amount in Canada?
A) gross national product B) disposable income
C) personal income D) gross domestic product
Answer: B
98) Theamount of after-tax income received by households is measured by:

A) personal income. B) disposable income.
C) net domestic income. D) discretionary income.
Answer: B
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99) Disposable income differs from personal income by:
A) personal consumption expenditures. B) transfer payments.
C) personal saving. D) personal taxes.
Answer: D
100) In a typical year which of the following measures of aggregate output and income is likely to be the
smallest?
A) net domestic income B) personal income
C) disposable income D) gross domestic product
Answer: C
101) Nondurable goods are products:

A) with expected lives of less than three years.
B) with expected lives of over 2 years.
C) with expected lives of over three years.
D) with expected lives of under 2 years.
Answer: A
102) Nominal GDP is:

A) the sum of all monetary transactions which occur in the economy in a year.
B) money GDP adjusted for inflation.
C) the sum of all monetary transactions involving final goods and services which occur in the
economy in a year.
D) the amount of production which occurs when the economy is operating at full employment.
Answer: C
103) GDP measured using current prices is called:

A) constant GDP. B) nominal GDP. C) real GDP. D) deflated GDP.
Answer: B
104) The term "real GDP" refers to:

A) GDP data which embody changes in the price level, but not changes in physical output.
B) GDP data which have been adjusted for changes in the price level.
C) the value of the domestic output after adjustments have been made for environmental pollution
and changes in the distribution of income.
D) GDP data which reflect changes in both physical output and the price level.
Answer: B
105) Real GDP measures:

A) base year output at current exchange rates. B)base year output at current prices.
C) current output at current prices. D) current output at base year prices.
Answer: D
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106) Real GDP and nominal GDP differ because the real GDP:
A) has been adjusted for changes in the price level.
B) excludes depreciation charges.
C) is adjusted for changes in the volume of intermediate transactions.
D) includes the economic effects of international trade.
Answer: A
107) If nominal GDP rises:

A) we can be certain that the price level has risen.
B) real GDP must fall.
C) real GDP must also rise.
D) real GDP may either rise or fall.
Answer: D
108) Real GDP is:

A) always greater than nominal GDP.
B) that aggregate output which is produced when the economy is operating at full employment.
C) the nominal value of all goods and services produced in the domestic economy corrected for
inflation or deflation.
D) the nominal value of all goods and services produced in the economy.
Answer: C
109) In comparing GDP data over a period of years a difference between nominal and real GDP may arise
because:
A) the price level may change over time.
B) the length of the workweek has declined historically.
C) depreciation may be greater or smaller than gross investment.
D) of changes in our trade deficits and surpluses.
Answer: A
Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit
prices of these three goods are A = $2, B = $3, and C = $1.
110) Refer to the above information. Nominal GDP in the current year is:
A) $115 B) $45 C) $90 D) $110
Answer: A
111) Refer to the above information. If the per unit prices of the three goods each were $1 in a base year
used to construct a GDP price index, then real GDP in the current year:
A) is $45.
B) is $110.
C) is $115.
D) cannot be determined on the basis of this data.
Answer: A
22
Assume an economy which is producing only one product. Output and price data for a three-year period are as follows.
112) Refer to the above data. The nominal GDP for year 3 is:
A) 30
B) 125 percent higher than the nominal GDP for year 1.
C) 120
D) 50 percent higher than the nominal GDP for year 1.
Answer: B
113) Refer to the above data. If year 2 is chosen as the base year, real GDP for year 1 is:
A) $100 B) $80 C) $25 D) $50
Answer: B
114) Refer to the above data. If year 2 is chosen for the base year, in year 3 nominal GDP and real GDP,
respectively, are:
A) $120 and $100. B) $180 and $120. C) $180 and $30. D) $30 and $5.
Answer: B
115) In an economy experiencing persistent deflation:

A) changes in nominal GDP overstate changes in real GDP.
B) changes in nominal GDP understate changes in real GDP.
C) changes in nominal GDP may either overstate or understate changes in real GDP.
D) potential GDP will necessarily exceed actual GDP.
Answer: B
116) If real GDP falls from one period to another, we can conclude that:
A) nominal GDP fell.
B) inflation occurred.
C) deflation occurred.
D) less goods and services have been produced.
Answer: D
23
117) Refer to the above diagram. The base year used in determining the price indices for this economy:
A) is more recent than 1992.
B) is 1992.
C) is some year before 1992.
D) cannot be determined from the information given.
Answer: B
118) Refer to the above diagram. Which of the following statements is correct?
A) The price index is greater than 100 for every year shown on the graph.
B) Nominal GDP must be deflated in each year since 1992 to determine real GDP.
C) Nominal GDP must be deflated in each year prior to 1992 to determine real GDP.
D) Real GDP has grown in this economy, but nominal GDP has not.
Answer: B
119) If real GDP rises and the GDP price index has increased:
A) nominal GDP may have either increased or decreased.
B) nominal GDP must have increased.
C) the percentage increase in nominal GDP must have been less than the percentage increase in
the price level.
D) nominal GDP must have fallen.
Answer: B
120) In determining real GDP economists adjust the nominal GDP by using the:
A) wholesale (producer) price index. B) consumer price index.
C) GDP price index. D) national productivity index.
Answer: C
24
121) The fact that nominal GDP has risen faster than real GDP:
A) suggests that the base year of the GDP price index has been shifted.
B) suggests that the general price level has fallen.
C) tells us nothing about what has happened to the price level.
D) suggests that the general price level has risen.
Answer: D
122) Nominal GDP is less than real GDP in an economy in year 1 and year 2. In year 3, nominal GDP is
equal to real GDP. In year 4, nominal GDP is slightly greater than real GDP. In year 5, nominal
GDP is significantly greater than real GDP. Which year is most likely to be the base year being used
to calculate the price index for this economy?
A) 3 B) 5 C) 4 D) 2
Answer: A
Answer the question(s) based on the following data, using year 1 as the base year. All dollars are in billions.
123) Refer to the above data. From year 1 to year 4, prices rose by:
A) 8 percent. B) 10 percent. C) 4 percent. D) 12 percent.
Answer: D
124) Refer to the above data. Real GDP in year 2 was approximately:
A) $3,271 billion. B) $3,402 billion. C) $3,295 billion. D) $3,245 billion.
Answer: A
125) A price index is:

A) a ratio of real GDP to nominal GDP.
B) a comparison of the price of a market basket from a fixed point of reference.
C) the cost of a market basket of goods and services in a base period divided by the cost of the
same market basket in another period.
D) a comparison of real GDP in one period relative to another.
Answer: B
25
The table below indicates the price and output data over a five year period for an economy that produces only one good.
126) Refer to the above data. If year 3 is chosen as the base year, the price index for year 1:
A) is 50. B) is 140. C) is 167. D) is 40.
Answer: A
127) Refer to the above data. The nominal GDP for year 4:
A) is $55. B) is $40. C) is $90. D) is $35.
Answer: C
128) Refer to the above data. If year 2 is the base year, the price index for year 3 is:
A) 150 B) 125 C) 133 D) 120
Answer: C
129) Refer to the above data. If year 2 is the base year, real GDP in year 5 is:
A) $120 B) $60 C) $30 D) $90
Answer: B
130) Refer to the above data. If year 2 is the base year, the percentage increase in real GDP from year 2 to
year 4 is:
A) 40 percent. B) 100 percent. C) 60 percent. D) 80 percent.
Answer: D
26
Assume an economy which is producing only one product. Output and price data for a three-year period are as follows.
131) Refer to the above data. If year 2 is chosen as the base year, the price index for year one is:
A) 80 B) 20 C) 100 D) 120
Answer: C
132) Refer to the above data. If year 2 is chosen as the base year, in years 1 and 3 the price index values,
respectively, are:
A) 4 and 6. B) 100 and 150. C) 6 and 4. D) 120 and 100.
Answer: B
133) For the above economy, the real GDP in year 3 is:
A) $480 B) $485 C) $520 D) $576
Answer: A
134) A price index can rise from one year to the next even though:
A) real GDP falls. B) some individual prices in the economy fall.
C) nominal GDP falls. D) all of the above occur.
Answer: D
135) In one year nominal GDP was $286 billion and the price index was 88. Real GDP in that year was:
A) $308 billion. B) $262 billion. C) $325 billion. D) $252 billion.
Answer: C
27
Following is data for a hypothetical economy. The base year is 2002 (Price index = 100).
136) Refer to the above data. Real GDP in 2006 was approximately:
Answer: B
137) Refer to the above data. From 2003 to 2006, prices rose by:
A) 10.7 percent. B) 9 percent. C) 7 percent. D) 3 percent.
Answer: A
138) Refer to the above data. From 2005 to 2006, prices rose by approximately:
A) 2 percent. B) 6 percent. C) 4.2 percent. D) 7 percent.
Answer: C
139) Consider the following data for a hypothetical economy:
The economy's real GDP has declined between years:

A) 3 and 4. B) 4 and 5. C) 1 and 2. D) 2 and 3.
Answer: A
140) Suppose nominal GDP was $360 billion in 2002 and $450 billion in 2012. The appropriate price
index was 100 in 2002 and 120 in 2012. It can be concluded that between 2002 and 2012 real GDP:
A) increased by about $90 billion. B) decreased by about $32 billion.
C) increased by about $117 billion. D) increased by about $15 billion.
Answer: D
28
(GDP figures are in billions of dollars.)
141) Refer to the above table. What was real GDP in Year 2?
Answer: B
142) Refer to the above table. What is the GDP price index in Year 1?
A) 105.2 B) 111.5 C) 109.6 D) 108.3
Answer: D
143) Nominal GDP is adjusted for price changes through the use of:
A) the Producer Price Index (PPI). B) exchange rates.
C) the GDP price index. D) the Consumer Price Index (CPI).
Answer: C
144) The GDP deflator or price index equals:

A) gross national product less net foreign factor income earned in the United States.
B) nominal GDP divided by real GDP.
C) real GDP divided by nominal GDP.
D) gross private domestic investment less the consumption of fixed capital.
Answer: B
Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit
prices of these three goods are A = $2, B = $3, and C = $1.
145) If the per unit prices of the three goods each were $1 in a base year used to construct a GDP price
index, then the GDP price index in the current year is:
A) 100 B) 205.5. C) 39.3. D) 255.5.
Answer: D
146) If nominal GDP in some year is $280 and real GDP is $160 the GDP price index for that year is:
A) 160 B) 57 C) 175 D) 280
Answer: C
29
147) The GDP price index:
A) includes fewer goods and services than the consumer price index.
B) is another term for the producer price index.
C) includes all goods comprising the nation's domestic output.
D) is identical to the consumer price index.
Answer: C
148) If real GDP in a particular year is $80 billion and nominal GDP is $240 billion, the GDP price index
for that year is:
A) 300 B) 100 C) 240 D) 200
Answer: A
149) In an economy, the total expenditures for a market basket of goods in year 1 (the base year) was
$5,000 billion. In year 2, the total expenditure for the same market basket of goods was $5,500
billion. What was the GDP price index for the economy in year 2?
A) 120 B) 110 C) 115 D) 100
Answer: B
150) Suppose a nation's 2008 nominal GDP was $972 billion and the general price index was 90. In order
to make the 2008 GDP comparable with the base year GDP, the 2008 GDP must be:
A) deflated to $896 billion. B) inflated to $1080 billion.
C) adjusted downward to $678 billion. D) deflated to $1080 billion.
Answer: B
151) Refer to the data below and using year 1 as the base year, the real GDP in year 4 was approximately:

Answer: B
152) Historically, real GDP has increased less rapidly than nominal GDP because:
A) price indices have not reflected improvements in product quality.
B) technological progress has resulted in more efficient production.
C) the general price level has declined.
D) the general price level has increased.
Answer: D
30
153) In 2001, in calculation of the implicit price index, Statistics Canada switched from fixed based price
index method to a chain-weighted index. The main reason for this was:
A) to avoid complex calculation of the fixed based price index.
B) to be able to use the relatively constant weights for the items in the GDP year after year.
C) to avoid underestimation of the GDP growth, due to the rapid growth in the information
technology sector.
D) to better represent the weight of each category especially the information technology sector.
Answer: D
154) The Chain-weighted index links each year to the previous year through:
A) the use of base year implicit price index.
B) the use of real GDPs in prior years.
C) the use of nominal GDPs in prior years.
D) the use of both the prior year prices and current year prices.
Answer: D
155) GDP excludes:

A) the production of illegal goods. B) the market value of household production.
C) off-the-books production. D) all of the above.
Answer: D
156) Assume that the size of the underground economy increases both absolutely and relatively over
time. As a result:
A) the accuracy of GDP will be unaffected through time.
B) GDP will tend to increasingly understate the level of output through time.
C) real GDP will rise more rapidly than nominal GDP.
D) GDP will tend to increasingly overstate the level of output through time.
Answer: B
157) GDP excludes most non-market transactions. Therefore, GDP tends to:
A) overestimate the amount of production of the economy.
B) overestimate the rate of inflation in the economy.
C) underestimate the rate of inflation in the economy.
D) underestimate the amount of production in the economy.
Answer: D
158) Gordon James is a person who sells narcotics "on the street." This type of illegal activity:
A) would be considered double counting in calculating GDP.
B) causes GDP to be overstated.
C) is excluded from GDP figures.
D) is estimated and included in GDP figures.
Answer: C
31
159) GDP tends to underestimate the productive activity in the economy because it excludes:
A) spending by the government on military goods.
B) the work done by construction companies to remodel homes.
C) spending by businesses to reduce the level of pollution.
D) the personal labour time homeowners spend on home repairs.
Answer: D
160) GDP tends to underestimate the productive activity in the economy because it excludes the value of
output from:
A) the underground economy. B) intermediate goods.
C) the consumption of fixed capital. D) public transfer payments to households.
Answer: A
161) The growth of GDP may understate changes in the economy's well-being over time if the:
A) environment deteriorates because of pollution.
B) amount of leisure decreases.
C) distribution of income becomes increasingly unequal.
D) quality of products and services improves.
Answer: D
162) GDP data are criticized as being inaccurate measures of economic welfare because:
A) they do not take into account changes in product quality.
B) they do not take into account changes in the amount of leisure.
C) they do not take into account the adverse effects of economic activity on the environment.
D) of all of the above considerations.
Answer: D
163) The GDP tends to:

A) understate economic welfare because it includes expenditures undertaken to offset or correct
pollution.
B) overstate economic welfare because it does not include certain non-market activities such as
the productive work of housewives.
C) overstate economic welfare because it does not reflect improvements in product quality.
D) understate economic welfare because it does not take into account increases in leisure.
Answer: D
164) GDP tends to overstate economic well-being because it takes into account:
A) health care costs related to the consumption of products with adverse health effects.
B) the personal labour time that car owners spend working on car repairs and maintenance of their
vehicles.
C) spending on intermediate goods that are used to produce final goods.
D) all of the illegal activities conducted by organized crime in the economy.
Answer: A
32
165) GDP tends to overstate economic well-being because it takes into account:
A) improvements in product quality over time.
B) nonmarket activities, such as the productive work of homemakers.
C) illegal activities of individuals and businesses.
D) expenditures undertaken to correct pollution.
Answer: D
166) Environmental pollution is accounted for in:

A) DI. B) PI.
C) GDP. D) None of the above.
Answer: D
167) Some of the production of an economy creates pollution. As a result:

A) GDP tends to understate social welfare. B) nominal GDP is greater than real GDP.
C) GDP tends to overstate social welfare. D) real GDP is greater than nominal GDP.
Answer: C
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
168) The simplest way to calculate GDP is to sum the total sales of all business firms.
Answer: True False
169) The purchase of Wal-Mart stock is a part of gross, but not of net, private domestic investment.
Answer: True False
170) All expenditures on new construction are included as investment in calculating GDP.
Answer: True False
171) In an economy, the value of inventories rose from $275 billion in 2000 to $300 billion in 2001. In
calculating total investment for 2001, national income accountants would increase it by $25 billion.
Answer: True False
172) In an economy, the value of inventories fell by $50 billion from Year 1 to Year 2. In calculating
total investment for Year 2, national income accountants would increase it by $50 billion.
Answer: True False
173) Gross private domestic investment exceeds depreciation in an economy experiencing expanding
production capacity.
Answer: True False
174) Government purchases include expenditures for social capital such as schools and highways that
have long lifetimes.
Answer: True False
33
175) Interest on the public debt is included as a part of government purchases in determining GDP by the
expenditures method.
Answer: True False
176) Exports are subtracted from imports in calculating Canadian GDP because exports are not available
for domestic consumption.
Answer: True False
177) Welfare payments to families with dependent children are included in GDP.
Answer: True False
178) The before-tax income received by resource suppliers is measured by disposable income.
Answer: True False
179) Durable goods are products with expected lives of less than three years.
Answer: True False
180) A price index is 100 times the ratio of real GDP to nominal GDP.
Answer: True False
181) If nominal GDP is 150 and the GDP price index is 200, real GDP is 75.
Answer: True False
182) If real GDP is 50 and nominal GDP is 100, the GDP price index is 200.
Answer: True False
183) To calculate the real GDP, Statistics Canada has started to consider both the quantities and prices in
the base year and the following year and then average the two.
Answer: True False
184) The current GDP price index used by Statistics Canada is referred to as the chain-weighted index,
because by using both the previous year prices and current prices it links each year to the prior year.
Answer: True False
34
Answer Key
Testname: UNTITLED19
1) A
2) D
3) C
4) D
5) C
6) D
7) B
8) A
9) B
10) C
11) C
12) D
13) D
14) A
15) D
16) D
17) D
18) D
19) C
20) D
21) C
22) D
23) A
24) B
25) D
26) C
27) A
28) D
29) D
30) B
31) D
32) D
33) C
34) A
35) C
36) C
37) C
38) C
39) A
40) B
41) A
42) B
43) A
44) C
45) C
46) B
47) B
48) A
49) B
50) B
35
Answer Key
51) B
52) C
53) A
54) D
55) B
56) C
57) B
58) B
59) D
60) A
61) B
62) D
63) B
64) C
65) A
66) C
67) D
68) D
69) D
70) C
71) D
72) B
73) A
74) B
75) D
76) C
77) B
78) A
79) B
80) D
81) D
82) C
83) D
84) D
85) D
86) B
87) B
88) A
89) B
90) B
91) B
92) D
93) C
94) B
95) D
96) C
97) B
98) B
99) D
100) C
36
Answer Key
101) A
102) C
103) B
104) B
105) D
106) A
107) D
108) C
109) A
110) A
111) A
112) B
113) B
114) B
115) B
116) D
117) B
118) B
119) B
120) C
121) D
122) A
123) D
124) A
125) B
126) A
127) C
128) C
129) B
130) D
131) C
132) B
133) A
134) D
135) C
136) B
137) A
138) C
139) A
140) D
141) B
142) D
143) C
144) B
145) D
146) C
147) C
148) A
149) B
150) B
37
Answer Key
151) B
152) D
153) D
154) D
155) D
156) B
157) D
158) C
159) D
160) A
161) D
162) D
163) D
164) A
165) D
166) D
167) C
168) FALSE
169) FALSE
170) TRUE
171) TRUE
172) FALSE
173) TRUE
174) TRUE
175) FALSE
176) FALSE
177) FALSE
178) FALSE
179) FALSE
180) FALSE
181) TRUE
182) TRUE
183) TRUE
184) TRUE
38
Another random document with
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operculum of Limulus (Fig. 153, 10). The form of the operculum,
more particularly of the median process, differs in the male and
female. In that which is believed to be the female (Fig. 162) the
median process is long, and extends beyond the posterior margin of
the operculum; it is formed of two small five-sided parts at the base
which are united at the sides to the two plates of the operculum;
behind this is a long, unpaired part, which is pointed in front; this,
together with the remaining parts, is not joined to the side-plates of
the operculum, so that the latter are here separated from one
another. The third part of the median process is shorter than the
second, and bears at its end a pair of small pointed and diverging
plates, the tips of which reach to the middle of the third plate-like
appendages. On the inner side of the operculum there are, in the
female, a pair of curved, tubular organs, attached to the anterior end
of the median process, where they open, the free ends being closed;
the function of these organs is not known, but was probably sexual.
In the male (Fig. 163, A, a) the median process is formed of two
parts only, and is very short, so that the two plates of the operculum
unite behind the process.
In the female a median process (Fig. 163, B) is also present
between the second pair of appendages (belonging to the third
segment of the mesosoma); it consists of a basal unpaired part, and
of a pair of long pointed pieces which project on to the next segment.
Just as in the case of the genital operculum the basal part is united in
front to the appendages, the remainder being free, and separating
the greater part of the two plate-like appendages. In the complete
animal the median process of this segment is covered by the median
process of the genital operculum. The remaining appendages of the
female, and all the appendages behind the operculum in the male,
are without any median process, and the plates of each pair unite by
a suture in the middle line.
Fig. 163.—Eurypterus fischeri, Eichw. Upper Silurian. (After
Holm.) A, Genital operculum of male; a, median process. B,
Middle part of second appendage of the mesosoma in the female,
showing the median process.
The metasoma (Fig. 161, 13–18) consists of six segments which

become longer and narrower from before backwards. Each segment
is covered by a ring-like sheath or sclerite, and bears no appendages.
The posterior end of the last segment is produced into a lobe on each
side, and between these lobes the long, narrow tail-spine arises (Fig.
161, 19).
The other genera of the Eurypterida do not differ in any important
morphological respects from the form just described, All the genera,
of which about thirteen have been recognised, are placed in one
family.
Fam. Eurypteridae.—The carapace varies somewhat in outline;
in Slimonia it is more distinctly quadrate than in Eurypterus, whilst
in Pterygotus (Fig. 164) and Hughmilleria[234] it is semi-ovoid. The
lateral eyes are at the margin of
the carapace in Pterygotus,
Slimonia (Fig. 165, a), and
Hughmilleria, but in the other
genera, including the earliest
form, Strabops,[235] they are on
the dorsal surface at a greater or
less distance from the margin.
The pre-oral appendages of
Pterygotus (Fig. 164, 1) differ
from those of other genera in
their much greater length and in
the large size of the chelae; they
probably consist of a proximal
joint and chelae only, although,
commonly, they are represented
as having a larger number of
joints. Unlike Eurypterus and
Pterygotus, the second pair of
appendages in Slimonia (Fig. 165,
2) differ from the third, fourth,
and fifth pairs in being distinctly
smaller and more slender, and it
Fig. 164.—Pterygotus osiliensis,
is probable that they were tactile.
Schmidt, Upper Silurian, Rootziküll, Whilst in Eurypterus the fifth
Oesel. Ventral surface. Reduced. (After pair of appendages are larger
Schmidt.) 1–6, Appendages of the than the three preceding pairs,
prosoma; 7–12, mesosoma; 7, 8, genital and also differ from them in
operculum; 13–18, metasoma; 19, tail- structure, in the genus
plate; a, epistome; b, metastoma; c,
Pterygotus (Fig. 164, 5) they
coxae of sixth pair of appendages.
agree closely with the second,
third, and fourth pairs, and in
Slimonia (Fig. 165, 5) they are nearly the same as the third and
fourth pairs. The sixth pair of appendages are much larger and more
powerful than the fifth pair in nearly all genera; in Stylonurus (Fig.
166), however, the sixth pair are similar to the fifth, both being
greatly elongated and slender; also in Eusarcus (Drepanopterus) the
sixth pair differ less from the preceding pair of appendages than is
usually the case.
In Pterygotus there is a well-developed epistome (Fig. 164, a)
between the mouth and the front margin of the carapace, thus
occupying the same position as the hypostome of Trilobites (p. 233).
The metastoma is always well developed and forms one of the
distinguishing features of the Eurypterids; in form it varies from oval
in Eurypterus, to cordate in Slimonia, and lyrate in Dolichopterus.
The principal modifications seen in the genital operculum are in
the form of its median process; in Slimonia this either ends in three
sharp points posteriorly (Fig. 165, c), or has the form of a truncated
cone; its form in Eurypterus has already been described.
Glyptoscorpius differs from other Eurypterids in the possession of
comb-like organs closely resembling the pectines of Scorpions.
Slimonia apparently differs from other genera in that the plate-like
appendages on the posterior three segments of the mesosoma do not
meet in the middle line (Fig. 165, 10–12). In some forms, such as
Pterygotus (Fig. 164), there is a nearly gradual decrease in the width
of the segments in passing from the mesosoma to the metasoma; but
in some others, which in this respect are less primitive, such as
Slimonia (Fig. 165), the posterior five segments of the body (like
those of Scorpions) are distinctly narrower and longer than the
preceding segments. The long tail-spine of Eurypterus is represented
in Slimonia by an oval plate produced into a spine at the end (Fig.
165, 19); whilst in some species of Pterygotus the plate is bi-lobed at
the posterior end (Fig. 164, 19). In Hughmilleria the tail-spine is
lanceolate.
The Eurypterids resemble the Xiphosura in many respects. In both
groups the prosoma consists of at least six fused segments, and bears
two pairs of eyes—one pair simple, the other grouped eyes—on the
dorsal surface of the carapace. The number and position of the
appendages of the prosoma in Eurypterids agree with those of
Limulus. The chelicerae are closely similar in both cases. The coxae
of all five pairs of legs in Eurypterids are toothed and function in
mastication; similarly in Limulus all are spiny except the coxae of the
last pair of legs. In both a similar epicoxite is present on the coxae.
The number of joints in the legs is somewhat greater in the
Eurypterids than in Limulus, and in the former none of the legs end
in chelae, whereas in the latter all the walking legs, except the last,
and also the first in the male, may be chelate. The metastoma of
Eurypterids differs in being a
large unpaired plate, but is
represented in Limulus by the
pair of relatively small chilaria.
On the mesosoma the genital
operculum and plate-like
appendages with branchial
lamellae are similar in both
groups, but in the Eurypterids the
genital operculum shows a
greater development and covers
the second segment, which is
without plate-like appendages. A
striking difference between the
two groups is seen in the
segments of the mesosoma and
metasoma; in Eurypterids these
are all free, whilst in Limulus they
are fused together, but this
difference is bridged over by
some of the Palaeozoic Xiphosura
(Fig. 159, A) in which those
segments are free.
Fig. 165.—Slimonia acuminata, Salter.
Upper Silurian. Restoration of ventral
surface, × ⅑ . 1–6, Appendages of
prosoma; 7, 8, genital operculum; 7–12,
mesosoma; 13–18, segments of
metasoma; 19, tail-spine; a, lateral eye;
b, metastoma, covering the inner parts
of the coxae of the last pair of
appendages; c, median process of
genital operculum; d, branchial
lamellae seen through the plate-like
appendages. (After Laurie.)
Fig. 166.—Stylonurus lacoanus, Claypole. Upper Devonian,
Pennsylvania. Restoration of dorsal surface. Length nearly five
feet. (After Beecher.)
The Eurypterids present a striking resemblance to Scorpions. In

both groups the segments in the three regions of the body are the
same in number, and the appendages of the prosoma also agree in
number and position. The pre-oral appendages are chelate in both,
but the second pair of appendages are chelate in the Scorpions only.
In Eurypterids the coxae of the five pairs of legs are toothed and
meet in the middle line, but in the Scorpions the coxae of the last two
pairs do not meet; this difference, however, appears to be bridged
over in the earliest known Scorpion—Palaeophonus,[236] from the
Silurian rocks. The Eurypterids are distinguished from the Scorpions
by the much greater development of the last pair of legs. The large
metastoma of the former is homologous with the sternum of the
Scorpion. The genital operculum is much smaller in Scorpions than
in Eurypterids, and in this respect the latter agree with Thelyphonus
(one of the Pedipalpi) more than with the Scorpions. The pectines
are absent in the Eurypterids except in Glyptoscorpius. Instead of
the lung-books of the Scorpions the Eurypterids possess branchial
lamellae on the plate-like appendages; but this difference between
the two groups appears to be bridged over by Palaeophonus, which
was marine, and may have possessed branchial lamellae since
stigmata seem to be absent.
Glyptoscorpius,[237] which is found in the Lower Carboniferous of
the south of Scotland, is a form of considerable interest. It is about a
foot in length, and agrees in many respects with Eurypterida, but it
may be necessary to separate it from that group since it possesses
pectines, and the legs end in a double claw; it cannot, however, be
regarded as a link between Eurypterids and Scorpions, but must
rather be considered as an offshoot from the former, since the latter
group was already in existence at a much earlier period.
ARACHNIDA EMBOLOBRANCHIATA
(SCORPIONS, SPIDERS, MITES, ETC.)
BY
CECIL WARBURTON, M.A.

Christ’s College, Cambridge; Zoologist to the Royal Agricultural Society
CHAPTER XII
ARACHNIDA (CONTINUED)—
EMBOLOBRANCHIATA—SCORPIONIDEA—
PEDIPALPI
SUB-CLASS II.—EMBOLOBRANCHIATA.[238]
Order I. Scorpionidea.
Segmented Arachnids with chelate chelicerae and pedipalpi. The

abdomen, which is broadly attached to the cephalothorax or
prosoma, is divided into two regions, a six-jointed mesosoma and a
six-jointed tail-like metasoma, ending in a poison-sting. There are
four pairs of lung-books, and the second mesosomatic segment
bears a pair of comb-like organs, the pectines.
The Scorpions include the largest tracheate Arachnid forms, and

show in some respects a high grade of organisation. It is impossible,
however, to arrange the Arachnida satisfactorily in an ascending
series, for certain primitive characteristics are often most marked in
those Orders which on other grounds would seem entitled to rank at
the head of the group. Such a primitive characteristic is the very
complete segmentation exhibited by the Scorpions. They are
nocturnal animals of rapacious habit. In size they range from
scarcely more than half an inch to eight inches in length. In the
northern hemisphere they are not found above the fortieth parallel of
latitude in the Old World, though in the New World they extend as
high as the forty-fifth. A corresponding southward limit would
practically include all the land in the southern hemisphere, and here
the Order is universally represented except in New Zealand, South
Patagonia, and the Antarctic islands.
Fossil scorpions are rarely found. The earliest examples known
occur in the Silurian rocks, and belong to the genus Palaeophonus.
In the Carboniferous Eoscorpius is found, and in the Oligocene
Tityus.
Much remains to be discovered with regard to the habits of
scorpions, and most of the isolated observations which have been
recorded lose much of their value through the uncertainty as to the
species concerned. The brief accounts given by Lankester and by
Pocock,[239] and the more recent and elaborate studies of Fabre,[240]
are free from this defect and contain almost the only trustworthy
information we possess.
All are viviparous, and the females carry the newly-hatched young
on their backs. They are predaceous, feeding for the most part on
insects and spiders. These are seized by the chelate pedipalps, and, if
small, are simply picked to pieces by the chelicerae and devoured,
but if large the tail-sting is brought into play and the victim quickly
paralysed. The process of eating is a slow one, and a Cape scorpion in
captivity took two hours to devour a cockroach.
In walking, scorpions carry their pedipalps horizontally in front,
using them partly as feelers and partly as raptorial organs. As
regards the body the attitude varies considerably. In some cases
(Parabuthus, Prionurus, etc.) it is raised high upon the legs, and the
“tail” or metasoma is curved forward over the back, but in others
(Euscorpius) the body is held low, and the “tail” is dragged along
behind, the end only being slightly curled. In the daytime they hide
away under wood or stone, or in pits which they dig in the sand.
Parabuthus capensis was observed to dig a shallow pit by means of
its second and third ambulatory legs, resting on its first and fourth
legs aided by the chelae and the metasoma. Those that hide under
wood are usually found clinging to their shelter ventral side
uppermost. In captivity the creatures, though supplied with water,
were never observed to drink; indeed, they are characteristic
inhabitants of arid steppes and parched wastes. Like most Arachnids
they can endure prolonged abstinence from food.
The only sense well developed seems to be that of touch.
Notwithstanding the possession of several eyes their sight is poor. A
moving object within the range of a few inches is certainly perceived,
but it has to be touched before its nature is recognised. Some writers
have attributed to scorpions a keen sense of hearing, and so-called
“auditory hairs” are described on the tibia of the pedipalp, but
Pocock came to the conclusion that Parabuthus capensis and
Euscorpius carpathicus were entirely deaf, and Lankester could
obtain no indication of auditory powers in the case of Prionurus. The
sense of touch is extremely delicate, and seems to reside in the hairs
with which the body and appendages are more or less thickly
clothed. The pectines are special tactile organs. That they are in some
way related to sex seems probable from the fact that they are larger
in the male and sometimes curiously modified in the female, but they
appear to be of use also in determining the nature of the ground
traversed by the animal, being long in such species as raise the body
high on the legs, and short in those that adopt a more grovelling
posture. Pocock noticed that a scorpion which had walked over a
portion of a cockroach far enough for the pectines to come in contact
with it immediately backed and ate it.
As is the case with most
poisonous animals, their ferocity
has been much exaggerated; they
never sting unless molested, and
their chief anxiety is to slink off
unobserved. The fables that they
kill their young, and that when
hard pressed they commit suicide
by stinging themselves to death,
perhaps hardly deserve serious
consideration. The latter
accusation is disproved by the
Fig. 167.—Buthus occitanus in the
mating period. (After Fabre.) fact that a scorpion’s poison has
no effect upon itself, or even upon
a closely allied species. Some
writers think that in the frantic waving of the “tail,” which is
generally induced by strong excitement, a scorpion may sometimes
inadvertently wound itself with the sharp point of its telson.
Fabre gives a fascinating account of the habits of Buthus occitanus,
which occurs in the south of France. He found these scorpions
plentifully in arid, stony spots exposed to the sun. They were always
solitary, and if two were found under the same stone, one was
engaged in eating the other. Their sight is so poor that they do not
recognise each other without absolute contact.
Fabre established colonies in his garden and study, providing them
with suitable soil and sheltering stones. They dug holes by reducing
the earth to powder by means of the three anterior pairs of legs—
never using their pedipalpi in the operation—and sweeping away the
débris with the tail. From October to March they ate nothing,
rejecting all food offered to them, though always awake and ready to
resent disturbance. In April appetite seemed to awaken, though a
very trifling amount of food seemed to suffice. At that time, too, they
began to wander, and apparently without any intention of returning,
and they continued daily to escape from the garden enclosure until
the most stringent measures were taken to keep them in. Not till they
were surrounded by glass and the framework of their cages covered
with varnished paper were their attempts to climb out of their prison
frustrated. Fabre came to the conclusion that they took at least five
years to attain their full size.
His most interesting
observations were concerned with
their mating habits, in connection
with which he noted some
extraordinary phenomena. After
some very curious antics, in
which the animals stood face to
face (Fig. 167) with raised tails,
which they intertwined— Fig. 168.—The “promenade à deux” of
Buthus occitanus. (After Fabre.)
evidently with no hostile
intention—they always indulged
in what Fabre calls a “promenade à deux,” hand in hand, so to speak,
the male seizing the chelae of the female with its own, and walking
backwards, while the female followed, usually without any
reluctance. This promenade occupied an hour or more, during which
the animals turned several times. At length, if in the neighbourhood
of a suitable stone, the male would dig a hole, without for a moment
entirely quitting its hold of the female, and presently both would
disappear into the newly-formed retreat.
After mating, the male was often devoured by the female.
Moreover, after any combat with an enemy, such as a Lycosa or a
Scolopendra, it appeared to be de rigueur to eat the vanquished, and
on such occasions only was any considerable amount of food
consumed.
The scorpions were not, however, anxious to fight, greatly
preferring to retire if possible; but when incited to combat, their
sting was quickly fatal to any mature insect, to spiders and to
centipedes. Curiously enough, however, insect larvae, though badly
wounded, did not succumb to the poison. Newly-hatched scorpions
mounted on the mother’s back, where they remained motionless for
a week, entirely unfed. They then underwent a moult, after which
they were able to forage for themselves.
External Structure.
The chitinous plates of the prosoma are fused to form a carapace.

Six segments are clearly indicated by the six pairs of appendages,
but, though the development of Scorpio affords little direct evidence
of the fact, there is reason to believe that there once existed a pre-
cheliceral segment,[241] as has been clearly proved in the case of the
spiders. An embryonic pregenital segment has also been recognised.
The six prosomatic appendages are those proper to the Arachnida,
being the chelicerae, pedipalpi, and four pairs of ambulatory legs.
The mesosoma, which is broadly attached to the prosoma, comprises
six segments, indicated ventrally by the genital operculum, the
pectines, and the four pairs of pulmonary stigmata. The last of the
broad abdominal segments, which tapers abruptly, belongs to the
metasoma, which also comprises six segments, and is succeeded by
the post-anal spine or sting.
Prosoma.—Near the middle of the carapace are two median eyes,
and on its antero-lateral borders are usually to be found groups of
smaller eyes, numbering from two to five. All the eyes are simple.
There is a difference, however, in their development, the median
eyes being diplostichous, or involving two layers of hypoderm, while
the lateral eyes are monostichous, and pass through a stage strikingly
like the permanent condition of the eyes of Limulus. The
arrangement of various slight longitudinal ridges on the dorsal
surface of the carapace is of systematic importance. On the ventral
surface, just in front of the genital operculum, is a sternum, never
large, and sometimes barely visible. Its shape and size constitute one
of the principal family characteristics.
Fig. 169.—Buthus occitanus. A, Dorsal view; B, ventral view.
(After Kraepelin.)
Mesosoma.—The dorsal plates or terga are distinct, and are

connected by soft chitin with their corresponding sterna.
Beneath the second abdominal segments are borne the “pectines”
or comb-like organs. In their structure four portions are
distinguishable, an anterior lamella or shaft attaching them to the
body, a middle lamella, the teeth, and the fulcra, a series of small
chitinous pieces intercalated between the bases of the movable teeth.
Beneath the third, fourth, fifth, and sixth segments are the paired
openings of the lung-sacs.
Metasoma.—The first segment is usually and the remainder are
invariably enclosed in complete chitinous rings and show
considerable variations in their comparative size and shape, and in
the arrangement of the ridges and keels with which they are usually
furnished. The post-anal segment is more or less globular at its base,
constituting a “vesicle,” and terminates in a fine curved point, the
“aculeus,” perforated for the passage of the delicate poison-duct.
With the abdomen fully extended the point is directed downward,
but in the attitude of attack or defence, when the “tail” is carried
horizontally over the back, the sting points forward in the
neighbourhood of the animal’s head.
Appendages.—The three-
jointed chelicerae are powerful
and chelate. The first joint is
small, but the second is strongly
developed and bears at its
anterior end on the inner side a
projection which forms the
immovable finger of the chela.
The third joint, or movable finger,
is articulated on the outer side,
and both fingers are armed with
teeth whose arrangement is
useful in distinguishing the
Fig. 170.—A, Diagram of a Scorpion’s species. The pedipalpi consist of
leg; 1, coxa; 2, trochanter; 3, femur; 4, six joints. The coxa is small and
patella; 5, tibia; 6, protarsus; 7, tarsus;
p.s, pedal spur; t.s, tibial spur. B,
has an inwardly directed lamella
Fourth tarsus of Palamnaeus which assists in feeding. The
swammerdami; l, lateral lobe. (After trochanter is also a small joint,
Pocock.) bearing, normally at right angles
to the longitudinal axis, the
powerful humerus or femur. Then
follows the brachium or tibia, again directed forward, and the last
two joints form the chela or “hand,” the terminal joint or movable
finger being on the outer side as in the chelicerae. In systematic
determination special attention is given to the “hand.” In some forms
the upper surface is uniformly rounded, while in others a “finger-
keel” divides it into two flattish surfaces almost at right angles. The
biting edges of the fingers are usually furnished with rows of minute
teeth arranged characteristically in the different genera. The
ambulatory legs are seven-jointed, though, unfortunately, authors
are not agreed upon the nomenclature of the joints. Kraepelin[242]
names them coxa, trochanter, femur, tibia, and three-jointed tarsus,
and Simon[243] agrees with him. Pocock’s names[244] are coxa,
trochanter, femur, patella, tibia, protarsus, and tarsus, and it is
certainly convenient that each joint should have a separate name, but
it must be borne in mind that the tibia of different authors is not
always the same joint. Special attention must be directed to the three
terminal joints, which furnish highly important characteristics. The
tibia (in Pocock’s sense) is sometimes provided with a “tibial spur” at
its lower distal extremity. From the soft arthrodial membrane
between the protarsus and tarsus may proceed one or more dark-
tipped claw-like spurs, the “pedal spurs.” The terminal joint (tarsus
of Pocock) is variously furnished with hairs and teeth, and always
ends in a pair of well-developed movable claws beneath which a
much reduced and sometimes almost obsolete third claw is
distinguishable. The tarsus generally projects in a “claw-lobe” over
the base of the superior claws, and sometimes lateral lobes are
present. The first and second coxae have triangular maxillary lobes
directed towards the mouth. The third and fourth coxae are fused
together on each side, and those on one side are separated from
those on the other by the sternum. In other respects the four pairs of
legs are usually similar.
Internal Anatomy.
The alimentary canal is a fairly uniform tube, nowhere greatly

dilated. The very small mouth leads into a small suctorial chamber,
and this is connected by a narrow oesophagus, which pierces the
cerebral nerve-mass, with a slightly dilated portion which receives
the ducts of the first pair of gastric glands, often called salivary
glands. The succeeding portion in the prosoma receives four or five
more pairs of ducts from the well-developed gastric glands. In the
rapidly narrowing first metasomatic segment the intestine receives
one or two pairs of Malpighian tubes, and thence proceeds to the
anus, situated ventrally in the last segment.
The vascular system is of the usual Arachnid type, the heart
being a seven-chambered dorsal longitudinal vessel lying in a
pericardium, with which it communicates by seven pairs of valvular
ostia. Lankester[245] has demonstrated several pairs of superficial
lateral veins connecting two deep-seated ventral venous trunks with
the pericardium. The lung-books are, so to speak, pushed in to
dilatations of these trunks, so that some of the lateral veins carry
blood newly aerated by the lung-books directly to the pericardium.
The nervous system is not greatly concentrated except in the
prosoma, where there is a single ganglionic mass which innervates
not only the whole prosoma but the mesosoma as far as the first and
sometimes the second pair of lung-books. There are two
mesosomatic ganglia, variously situated in different genera, and each
metasomatic segment has its ganglion.
The generative organs are more or less embedded in the gastric
glands. There are two testes, each composed of a pair of
intercommunicating tubules, and connected by a common vas
deferens with the generative aperture, which is furnished with a
double protrusible intromittent organ. A pair of vesiculae seminales
and a pair of accessory glands are also present. The female possesses
a single ovary, consisting of a median and two lateral tubules, all
connected by cross branches.
In addition to the external sclerites a free internal skeletal
plate, situated in the prosoma between the alimentary canal and the
nerve-cord, furnishes convenient fulcra for muscular attachment. It
is known as the “endosternite.”
Brauer[246] has made the most complete study of the development
of Scorpio, and two of the most interesting of his conclusions may be
mentioned here. He has shown the lung-books to be derived from
gills borne on mesosomatic appendages. Moreover he found in the
embryo five pairs of segmental ducts—in segments 3–6 and 8—and
demonstrated that those of segment 5 persisted, though without
external aperture, as coxal glands, and those of segment 8 as the
genital ducts.
Classification.
More than 350 species of scorpions have been described, but many
of these are “doubtful,” and probably the number of known forms
may be put at about 300. These are divided by Kraepelin[247] into six
families and fifty-six genera. The best indications of the family of a
scorpion are to be found in the shape of the sternum, the armature of
the tarsi, and the number of the lateral eyes, while assistance is also
to be derived from the shape of the stigmata and of the pectines, and
from the absence or presence of a spine beneath the aculeus.
The six families are: Buthidae, Scorpionidae, Chaerilidae,
Chactidae, Vejovidae, and Bothriuridae.
Fam. 1. Buthidae.—Sternum small and generally triangular.
Tibial spurs in the third and fourth legs. Generally a spur beneath
the aculeus. Lateral eyes three to five in number.
There are two sub-families: Buthinae and Centrurinae.
The Buthinae, which possess a tibial spur, comprise fourteen
genera, most of them Old World forms. The principal genera are
Buthus, which contains about 25 species, and Archisometrus with 20
species. One genus only, Ananteris, is South American, and it
includes only a single species. The genus Uroplectes, with 16 species,
is almost entirely African.
The Centrurinae, without tibial spur, are New World scorpions,
though Isometrus europaeus (maculatus) is cosmopolitan. The
principal genera are Tityus with 30 species, Centrurus with 13, and
Isometrus with 6.
Fam. 2. Scorpionidae.—Sternum broad and pentagonal, with
sides approximately parallel. No tibial spur, but a single pedal spur.
Generally three lateral eyes.
Nearly a hundred species of Scorpionidae have been described,
distributed among fifteen genera. The following sub-families are
recognised: Diplocentrinae, Urodacinae, Scorpioninae,
Hemiscorpioninae, and Ischnurinae.
The Diplocentrinae have a spur under the aculeus. They form a
small group of only eight species. The principal genus, Diplocentrus,
is entirely Neotropical, but Nebo has a single Old World
representative in Syria.
The Urodacinae, with the single genus Urodacus, are Australian
scorpions. As in the next sub-family, there are rounded lobes on the
tarsi, but there is only a single keel on the “tail,” and the lateral eyes
are two in number. Six good and three doubtful species are
recognised.
The Scorpioninae are Asiatic and African forms, and are
recognised by the tarsi having a large lobe on each side, by the
convex upper surface of the “hand,” by the presence of two median
keels on the “tail,” and by the possession of three lateral eyes.
Palamnaeus (Heterometrus) has sixteen species in the Indian
region. There are about thirty species of Opisthophthalmus, all
natives of South Africa. Pandinus includes about ten species, but
there are only two species of the type genus Scorpio, S. maurus and
S. boehmei.
The sub-family Hemiscorpioninae was formed for the reception of
the single Arabian species Hemiscorpion lepturus. Its most striking
characteristic is the cylindrical vesicle of the tail in the male.
The Ischnurinae differ from the Scorpioninae chiefly in the
absence of the tarsal lobes, the presence of a well-marked finger-keel,
and the generally more depressed form of the body and hand. In the
opinion of some authors they should be separated from the
Scorpionidae as a distinct family, the Ischnuridae. There are more
than twenty species, divided among six genera. The type genus
Ischnurus has only the single species I. ochropus. There are eight
species of Opisthacanthus, which has representatives in Africa and
America.
Fam. 3. Chaerilidae.—Sternum pentagonal with median
depression or “sulcus” rounded posteriorly. Two pedal spurs.
Stigmata circular. Two lateral eyes with a yellow spot behind the
second. Pectines very short.
This small family has the single genus Chaerilus with but seven
species, natives of the Oriental region.
Fam. 4. Chactidae.—Two pedal spurs. Two lateral eyes (or,
rarely, no eyes) but without yellow spot. Characteristic dentition on
movable finger of “hand.”
There are three sub-families, Megacorminae, Euscorpiinae, and
Chactinae.
The Megacorminae include but a single Mexican form,
Megacormus granosus. There is a single toothed keel under the
“tail,” and all the under surface is spiny. There is a row of long
bristles under the tarsus.

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Macroeconomics Canadian 14th Edition

Mcconnell Test Bank

1) A nation's gross domestic product (GDP):

2) The GDP is the:

4) Gross domestic product (GDP) measures and reports output:

5) GDP may be defined as:

6) GDP is the total market value of:

9) The term "final goods and services" refers to:

10) GDP includes:

11) Which is included in GDP?

12) An example of a final good in national income accounts would be new:

13) Which of the following is a final good or service?

15) Which of the following is an intermediate good?

19) Value added refers to:

23) Value added is the value of a firm's output minus:

A) $6,500 B) $10,300 C) $3,000 D) $3,800

27) A distinguishing characteristic of public transfer payments is that:

28) Suppose Smith pays $100 to Jones.

31) Transfer payments are:

33) In calculating GDP by the income approach, we should sum up:

34) In calculating GDP by the expenditure approach, we sum up:

35) A nation's gross domestic product (GDP) by the expenditure approach:

36) The largest component of total expenditures in Canada is:

37) Which of the following do national income accountants consider to be "investment"?

38) As defined in national income accounting, investment includes:

40) Which of the following is not an economic investment?

41) If the economy adds to its inventory of goods during 2012:

42) In calculating GDP, national income accountants:

46) Net investment refers to:

48) When an economy's production capacity is expanding:

52) An economy is enlarging its stock of capital goods:

53) A nation's stock of capital goods will decline when:

54) In an economy experiencing a declining production capacity:

58) Which would be considered an investment according to economists?

59) Which would be considered an investment according to economists?

60) Gross investment refers to:

61) From an economist's perspective, which is not considered to be an investment?

66) Refer to the information below. Net investment:

All figures are in billions.

A) cannot be determined from the data given. B) is $72.

67) In national income accounting, G stands for:

69) Net exports are:

70) Net exports are negative when:

71) The smallest component of aggregate spending in Canada is:

72) The value of Canadian imports is:

76) Grossdomestic product (GDP) is equal to personal consumption expenditures:

80) Refer to the information below. GDP is:

All figures are in billions of dollars.

A) $402 B) $417 C) $467 D) $422

81) GDP by the expenditure approach is equal to:

A) $282 B) $300 C) $309 D) $326

A) $609 B) $592 C) $584 D) $636

85) Wages, salaries, and supplementary labour income in Canada:

88) Interestand investment income includes:

90) Net Domestic Income at the factor cost refers to the:

All figures are in billions of dollars.

A) cannot be calculated. B)is $32.