1.Gross Domestic Product (GDP) measures

A. the total market value of all final goods and services produced by domestic residents within the borders of a country pr abroad over a period of time.

B.the total market value of all final goods and services produced within the country over a period oof time.

C. the total market value of all intermediate goods and services produced within the economy over a period of time.

D.the total market value of all second-hand goods and services within the economy over a period of time.

2.Increasing income tax and business tax is an example of

A.expansionary monetary policy.

B.contractionary monetary policy.

C.expansionary fiscal policy.

D.contractionary fiscal policy.

3.The implementation of contractionary fiscal policy will lead to a

A.fall in income tax, which will increase the disposable income and consumption level.

B.rise in income tax, which will decrease the disposable income and consumption level.

C.fall in business tax, which will increase investment.

D.fall in interest rate, which will increase investment and consumption level.

4.Changing the level of government expenditure is an example of

A.monetary policy.

B.fiscal policy.

C.exchange rate policy.

D.interest rate policy.

5.When the government spends more on infrastrucutre and health care, this is an example of

A.expansionary fiscal policy which aims to reduce unemployment rate.

B.expansionary fiscal policy which aims to reduce inflation rate.

C.contractionary fiscal policy which aims to reduce inflation rate.

D.contractionary fiscal policy which aims to reduce unemployment rate.

6.Which of the following is an advantage of international trade?

A.International trade increases pollution level.

B.International trade causes unemployment rate to rise.

C.International trade increases national income and improves standard of living.

D.International trade causes inflation rate to rise.

7.Which of the following is NOT a trade barrier:

A.Fixed exchange rate regime.

B.Import tariffs.

C.Import quota.

D.Export subsidy.

8.A country is said to have comparative advantage of trade if it can

A.produce at a higher opportunity cost.

B.produce at a lower opportuntiy cost.

C.import more goods and services.

D.produce more goods or services as compared to other countries.

9.Which of the following is NOT an advantage of international trade?

A.Increases the variety of goods and services.

B.Increases national income and improves standard of living.

C.Increase competition and hence improves the quality of products.

D.To protect infant industries.

10."A rise in AE of $10 million will increase its real GDP by $25 million. Thus, its expenditure multiplier is "

A.0.4

B.2.5

C.1

D.250