Quiz 1- Ecn 102 (105)

10 Questions | Total Attempts: 64

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Quiz 1- Ecn 102 (105) - Quiz

Principles of Macroeconomics


Questions and Answers
  • 1. 
    An inflationary output gap occurs when
    • A. 

      Demand for labor services is very low.

    • B. 

      Actual GDP exceeds potential GDP.

    • C. 

      Nominal GDP exceeds real GDP

    • D. 

      Potential GDP exceeds actual GDP

  • 2. 
    An economy's current GDP is $500 million, the labor force is composed of 5 million people, and 4 million people are employed. What is the economy's labor productivity?
    • A. 

      $50

    • B. 

      $75

    • C. 

      $ 100

    • D. 

      $ 125

  • 3. 
    A recessionary output gap is characterized by
    • A. 

      Real GDP exceeding potential output.

    • B. 

      Constant prices.

    • C. 

      Rising prices.

    • D. 

      Real GDP falling below potential output.

  • 4. 
    The economy's output gap is defined as the
    • A. 

      Result of economic growth.

    • B. 

      Difference between nominal GDP and real GDP.

    • C. 

      Difference between actual GDP and potential GDP.

    • D. 

      Level of total output that would be produced if capacity utilization is at the normal rate.

  • 5. 
    When Yd is $ 1000, C is $800, the value of average propensity to   consume (APC) is
    • A. 

      0.6

    • B. 

      0.7

    • C. 

      0.8

    • D. 

      0.9

  • 6. 
    If the consumption function is C = 1400 + 0.78Y, value of MPC is
    • A. 

      0.40

    • B. 

      0.78

    • C. 

      1

    • D. 

      1.40

  • 7. 
    The trend shows
    • A. 

      Long-run economic growth

    • B. 

      Short-run growth

    • C. 

      Short-run fluctuation

    • D. 

      Long-run fluctuation

  • 8. 
    Business cycle shows
    • A. 

      Short-run growth

    • B. 

      Short-run fluctuation

    • C. 

      Long-run economic growth

    • D. 

      Long-run fluctuation

  • 9. 
    In the consumption function, C=a+bY, ‘b’ is
    • A. 

      The marginal propensity to import

    • B. 

      The marginal propensity to consume

    • C. 

      The marginal propensity to spend

    • D. 

      The marginal propensity to save

  • 10. 
    The slope of the AE function is called
    • A. 

      The marginal propensity to import

    • B. 

      The marginal propensity to consume

    • C. 

      The marginal propensity to spend

    • D. 

      The marginal propensity to save

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