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| 1 | |
The key issues of macroeconomics are _______ . |
| | A) | unemployment. |
| | B) | inflation. |
| | C) | economic growth. |
| | D) | all of the above. |
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| 2 | |
_____________________ (GNP) measures the activity of an economy, the quantity of goods and services the economy can afford to purchase. |
| | A) | Real output |
| | B) | Real income |
| | C) | Real expenditure |
| | D) | All of the above |
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| 3 | |
The circular flow shows how real resources and financial payments flow between firms and factories. |
| | A) | True |
| | B) | False |
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| 4 | |
Investment is the purchase of ______________ by firms. |
| | A) | shares |
| | B) | new capital goods |
| | C) | raw materials |
| | D) | electricity |
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| 5 | |
_________ or stocks are goods currently held by a firm for future production or sale. |
| | A) | produce |
| | B) | intermediate goods |
| | C) | inventories |
| | D) | work-in-progress |
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| 6 | |
_______ are domestically produced but sold abroad. _______ are produced abroad but purchased for use in the domestic economy. |
| | A) | withdrawals, injections |
| | B) | exports, injections |
| | C) | exports, imports |
| | D) | injections, imports |
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| 7 | |
Depreciation is the rate at which the value of the existing variable inputs decline per period as a result of usage or obsolescence. |
| | A) | True |
| | B) | False |
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| 8 | |
Indicate below what is not measured by GNP: |
| | A) | housekeeping services |
| | B) | industrial output |
| | C) | service industry output |
| | D) | total incomes |
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| 9 | |
The difference between nominal GNP and real GNP is: |
| | A) | interest payments. |
| | B) | tax payments. |
| | C) | inflation adjustment. |
| | D) | social security payments. |
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| 10 | |
In an economy, measuring (1)total value added, (2)total spending on final goods and (3)total factor earnings gives the result that: |
| | A) | 3 is greater than 2 which is greater than 1. |
| | B) | 3 equals 2 equals 1 |
| | C) | 3 is less than 2 which is less than 1 |
| | D) | any measure can be larger or smaller than any other. |
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| 11 | |
In the circular flow of income, saving is an injection and investment is a leakage. |
| | A) | True |
| | B) | False |
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| 12 | |
In the economy when a steel producer sells steel to car producer, it is regarded as _______._______ |
| | A) | a final good |
| | B) | an intermediate good |
| | C) | an injection |
| | D) | a leakage |
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| 13 | |
Leakages from the circular flow are ____________, ____________ and ____________. |
| | A) | investment, savings, government expenditure |
| | B) | savings, taxes net of subsidies, imports |
| | C) | consumption, investment, government expenditure |
| | D) | consumption, taxes, imports |
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| 14 | |
Injections into the circular flow are ___________, _____________ and _____________. |
| | A) | taxes, investment, exports |
| | B) | investment, exports, transfer payments |
| | C) | investment, government expenditure, exports |
| | D) | taxes, exports, transfer payments |
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| 15 | |
In the circular flow in equilibrium we would expect leakages to ____________ injections. |
| | A) | equal |
| | B) | be less than |
| | C) | be greater than |
| | D) | be less or greater than |
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| 16 | |
Gross national product adjusts GDP for net property income from abroad. |
| | A) | True |
| | B) | False |
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| 17 | |
Nominal GNP measures income ____________. |
| | A) | At the present time |
| | B) | Corrected for tax changes |
| | C) | Corrected for changes in interest rates |
| | D) | At current prices |
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| 18 | |
Real GNP measures income _____________. |
| | A) | including non-market activities |
| | B) | adjusted for inflation |
| | C) | including externalities |
| | D) | including tax evasion |
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| 19 | |
Real GNP is a crude measure of national welfare because it excludes _______ . |
| | A) | consumption |
| | B) | investment |
| | C) | exports |
| | D) | work in the home |
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| 20 | |
When we refer to the hidden economy we mean unrecorded income owing to _________. |
| | A) | tax evasion |
| | B) | poor statistics |
| | C) | the lags between statistical collection and publication |
| | D) | smuggling |
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