Macroeconomics Answers

Which of the following statements is/are correct?

a) Suppose the real GDP in 2005 is 400, and is 420 in 200. This shows that economic growth in 2006 is 20%
b) If the economy is in the cyclical upswing, the policy makers should solve the problem by raising the taxes
c) Domestic demand is primarily a function of income

1) a
2) b
3) b and c
4) a and c
5) All the statements are correct

........................ is NOT likely to cause a problem in the measurement of GDP.

1) Pollution
2) Smuggling
3) Commercial Farming
4) Adjustment of original data

If the base year prices are used during the measurement of GDP, then the.................is obtained.

1) Current GDP
2) Gross national product
3) Real GDP
4) Nominal GDP

When measuring the GDP, ................ should be considered.

a) Changes in population
b) Changes in unemployment
c) Changes in prices

1) b
2) c
3) a and c
4) b and c
5) All the statements are correct

Which of the following statements is/are correct regarding unemployment in the Keynesian and the AD-AS models?

a) In the production function, all the inputs are assumed to be fixed
b) The slope of the production function increases as the level of unemployment decreases
c) An increase in the real production always implies that unemployment rate will decline

1) b
2) a
3) b and c
4) a and b
5) Non of the above statements

.................would result due to the closure of the gold mines in South Africa.

1) Seasonal unemployment
2) Structural unemployment
3) Cyclical unemployment
4) Frictional unemployment

Use the information below for the country Zip. All the figures are in millions.

Total population in 2016 1800
Total labour force in 2015 550
Economically active population in 2016 675
Number of people unemployed in 2016 225

The unemployment rate in 2016 is equal to...
1) 41%
2) 38%
3) 33.3%
4) 81%

Suppose that the CPI for July 2013 is 101.9 (with 2012 = 100) and the CPI for July 2014 is 108.8. The inflation rate between July 2013 and July 2014 is...

1) 1.9%
2) 8.8%
3) 6.8%
4) None of the above

Due to inflation, an increase in nominal wages will cause...

1) The real incomes to rise
2) The average rates of personal income tax to decrease
3) The average rates of personal income tax to increase
4) No change in the average rates of personal income tax

Assume that Betty is a borrower while Tony is a money lender. Suppose Betty obtains a loan from Tony to be repaid within 12 months at a given interest rate.

Which one of the following statements is correct?

a) If the interest rate is greater than the inflation rate, then Tony will be worse off than Betty
b) If the interest rate is lower than the inflation rate, then Betty will be worse off than Tony
c) If the inflation rate is lower than the interest rate, then Tony will receive a higher compensation for his income

1) c
2) b
3) a
4) a and c
5) a and b