# Quiz 1- Ecn 102 (105)

10 Questions | Total Attempts: 64  Settings  Principles of Macroeconomics

• 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.
• 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 Back to top