Macroeconomics, Definitions.
35 Questions
| Attempts: 542
IB Economics HL. Definitions QUIZ. Section 3. Macroeconomics. National income, aggregate demand and aggregate supply.
Questions and Answers
- 1.
"Foregoing current consumption to allow for consumption in the future" What is being defined?
- A.
Leakage
- B.
Injection
- C.
Saving
Correct Answer
C. Saving -
- 2.
Output method: "Method measuring national income by taking the value of all the goods and services [1] in an economy" Income method: "Method measuring national income by taking the value of all the [2] earned in an economy" Expenditure method: "Method measuring national income by taking the value of all [3] on goods and services in the economy"
- A.
[1] = Sold, [2] = Incomes, [3] = Spending
- B.
[1] = Sold, [2] = Incomes, [3] = Taxes
- C.
[1] = Produced, [2] = Incomes, [3] = Spending
Correct Answer
C. [1] = Produced, [2] = Incomes, [3] = Spending -
- 3.
GDP per capita is GDP divided by ...
- A.
GNP
- B.
The size of the population
- C.
The size of the labor force
- D.
Twenty-five
Correct Answer
B. The size of the population -
- 4.
Nominal GDP is the value of GDP at [...] prices
Correct Answer
current - 5.
Real GDP is the value of GDP at [...] prices
Correct Answer
constant - 6.
Real GDP can also be defined as the nominal GDP adjusted for [...]
Correct Answer
inflation - 7.
"The total of all economic activity in a country" What is being defined?
- A.
GNP
- B.
GDP
- C.
Nominal GDP
- D.
Deflationary gap
Correct Answer
B. GDP -
- 8.
NNP is the GNI minus capital consumption or "[...]"
Correct Answer
depreciation - 9.
GNP can be defined as "the total income earned by a country's factors of production"
- A.
True
- B.
False
Correct Answer
A. True -
- 10.
GNP can also be defined as "the net property income from [...]"
Correct Answer
abroad - 11.
"Income measured in how much it can buy (after inflation)" is Callie's beautiful definition of ...
- A.
Disposable income
- B.
False income
- C.
Real income
Correct Answer
C. Real income -
- 12.
Given the answer to question 11, the "household income after the deduction of taxes and addition of benefits" should be the [...]
Correct Answer
disposable income - 13.
The aggregate demand is the total demand for all [...] goods and services in a period time at a given price level
Correct Answer
final - 14.
"A change in aggregate spending on net exports, that results because a change in price level alters the relative prices of exports and imports" What is being defined?
- A.
Real balance effect
- B.
Net export effect
- C.
Interest rate effect
Correct Answer
B. Net export effect -
- 15.
"Consumption", when defined as a factor which determines Aggregate demand, can be defined as: "The total spending by consumers on goods and services"
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
To be on the safe side, add a "domestic" between "on" and "goods". Otherwise it may apply to spending on imports/exports and that's another factor of AD.Rate this question:
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- 16.
Investment is "the addition of capital [...] to the economy"
Correct Answer
stock - 17.
"The effect on spending of changes in the ratio of money balances to income" What is being defined?
- A.
Real balance effect
- B.
Net export effect
- C.
Interest rate effect
Correct Answer
A. Real balance effect -
- 18.
"The increase in investment or spending resulting from firms or consumers taking advantage of lower interest rates" Is the proper name for this the "interest rate effect"?
- A.
Yes
- B.
No
Correct Answer
A. Yes -
- 19.
There are two main types of investment: Replacement investment - when firms spend on capital to maintain the productivity of existing capital, and [...]
Correct Answer
induced investmentExplanation
Induced investment is when firms spend on capital to increase their output to respond to a higher demandRate this question:
- 20.
Define "government spending"
- A.
The inflation occuring when government neglect elderly citizens
- B.
The spending on goods and services by the government
- C.
The spending on goods and services by the individual consumer
Correct Answer
B. The spending on goods and services by the government -
- 21.
In economics, the difference between export revenues and income expenditure is known as ...
- A.
Net exports
- B.
Net imports
Correct Answer
A. Net exports -
- 22.
Fiscal policy is the set of a government's policies relating to its ...
- A.
Money supply
- B.
Money supply and control of interest rates
- C.
Control of interest rates and taxation rates
- D.
Spending and taxation rates
Correct Answer
D. Spending and taxation rates -
- 23.
"The set of official policies governing the supply of money and the level of interest rates in an economy" is the government's [...]
Correct Answer
monetary policy
monetary policies - 24.
"Policies used to increase the potential output of an economy by increasing quantity or quality of factors of production" Which policies are these?
- A.
Fiscal policies
- B.
Monetary policies
- C.
Supply-side policies
- D.
Demand-side policies
Correct Answer
C. Supply-side policies -
- 25.
"The total amount of goods and services produced in an economy at every given price level" What is being defined
Correct Answer
AS
Aggregate supply - 26.
"The sale of public, government-owned firms to the private sector" What is this known as?
- A.
Deregulation
- B.
Interventionist supply-side policies
- C.
Privatization
Correct Answer
C. Privatization -
- 27.
Market-oriented supply-side policies are policies aiming to increase potential output by government actions
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Defined here are "interventionist supply-side policies". Market-oriented supply-side policies are policies aiming to increase potential output by allowing markets to operate more freely.Rate this question:
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- 28.
[...] is a supply-side policy which involves the removal or reduction of regulations to firms in order to increase aggregate supply
Correct Answer
Deregulation - 29.
The gap created when the level of AD in the economy cannot be satisfied given existing resources, is known as a(n)
Correct Answer
inflationary gap - 30.
The gap created when the level of AD in the economy is not sufficient to buy up all the potential output, is known as a(n)
Correct Answer
deflationary gap - 31.
"The periodic fluctuations in economic activity measured by changes in real GDP" What is being defined?
- A.
Depreciation
- B.
Multiplier effect
- C.
Business cycle
- D.
Accelerator theory
Correct Answer
C. Business cycle -
- 32.
The accelerator theory is a theory suggesting that the level of induced investment is determiened by the rate of change of [...]
Correct Answer
National income
NI - 33.
"The level of real output where aggregate demand is equal to aggregate supply is known as the microeconomic equilibrium"
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
It's known as the "macroeconomic equilibrium"Rate this question:
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- 34.
Capital equipment loses its value over time. This is known as depreciation, or [...]
Correct Answer
capital consumption - 35.
"When the increase in spending on domestic goods and services "multiplies" and results in an even larger increase in real GNP" What is being defined?
- A.
Accelerator theory
- B.
Multiplier effect
- C.
Queuing
- D.
Gini effect
Correct Answer
B. Multiplier effect -
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Apr 15, 2016Quiz Edited by
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Apr 15, 2016Quiz Created by
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