(1)Which of the following statements about principle#5 is false? (a)It is one of three (3) principles that are organized in its category (b)It states that "Markets are always a good way to organize economic activity" (c)It is organized in category#2 (d)None of the above (2)Which of the following pairs of principles is organized in category#2? (a)"The cost of something is what you give up to get it" and "Trade makes everyone and every nation better off" (b) "Rational people think and make decision at the margin" and "People face trade-offs" (c)"Trade makes everyone and every nation better off" and "Government can sometimes improve market outcomes" (d) "A country's standard of living depends on its ability to produce goods and services" and "Government can sometimes improve market outcome" (3)Which of the following statements is false? Given the problem of scarcity in every society, each economic system must make which of the following choices? (a)What to produce? (b)How to produce? (c)For whom to produce? (d)None of the above (4)Which fundamental economic question requires society to choose the technological and resource mix used to produce goods? (a)The when to produce question

2 (b)The How to produce question (c)The Where to produce question (d)The for Whom to produce question (5)Which of the following statements is false? The neo-classical economists believe that: (a)Free markets are the best way to allocate resources in a society (b)Government is a necessary good to be tolerated (c)Individual preferences, scarcity and technology determine macroeconomic outcomes (d)None of the above (6)The opportunity cost to a city for using local tax revenues to construct a new park is the: (a)Dollar cost of the old park (b)Dollar cost of constructing the new park (c)Best alternative foregone by building the park (d)Increased taxes required to pay for the maintenance of the new park (7)A line that has a different slope at each point is a: (a)Straight line (b)Vertical line (c)Curve (d)Horizontal line (8)Which of the following is included in the study of macroeconomics? (a)Salaries of college professors (b)Laptop prices (c)Rate of investment for a nation (d)The relative prices of gold and diamonds (9)Which of the following expenditures would not be included in a country's GDP for 2021? (a)Purchase of a new refrigerator manufactured in 2016 (b)Purchase of a ticket to a Jazz concert in 2021 (c)Purchase of a diamond bracelet sold new in 1985 (d)None of the above (10)Which of the following is an example of financial investment spending in an economy? (a)The construction of a neurosurgical hospital in Cleveland (b)The purchase of 100 drilling machines for deep water drilling (c)The purchase by the CEO of a company of $120m worth of stocks (d)A multimillion dollar renovation of the physical structure of a mall (11)Suppose you are told that in 2009 US GDP is disaggregated into its component aggregates as follows: ? Consumer spending =$10,093b ? Investment spending =$1,623b ? Government spending =$2,933 ? Net exports =-$390b The monetary value of the GDP based on the data given in the question is: (a)$14,649b (b)$13,625b (c)$14,259b (d)$16,895b (12)The investment spending as a percentage share of the GDP of the economy in Q#11 is: (a)20.6 percent (b)12.8 percent (c)11.4 percent (d)70.8 percent (13)Which of the following statements is true?

3 The market value of used goods is excluded from the calculation of a country's GDP to: (a) Avoid double counting (b)Avoid overstating the value of GDP when they are sold as old goods (c)To avoid counting them when sold as new goods and again when sold as old goods (d)All of the above (14)A marginalized worker is one who---------------------------------- (a)Has very little skills (b)Is underemployed (c)Is permanently left out of the labor force (d)None of the above (15)A business cycle in an economy is: (a)The period of three phases made up of peak, depression and recovery (b)The period in which expansion and contraction of economic activity are equal (c)The periodic growth and decline in real GDP, income and employment (d)The period of time in which business is established and grows (16)Household expenditures on durable consumer goods in a nation are a component of: (a)Gross investment expenditures (b)Government expenditures (c)Personal consumption expenditures (d)Export earnings (17)If an economy's population grows at 3 percent and real GDP grows at 2 percent on average during 1985-1995: (a)Per capita real GDP is increasing (b)Per capita real GDP is constant (c)Per capita real GDP is decreasing (d)The economy's standard of living is rising (18)Which of the following policy measure is more likely to combat inflation in an economy that experiences a rapid rate of growth of AD relative to AS? (a)Expansionary fiscal policy (b)Contractionary monetary policy (c)Expansionary monetary policy (d)None of the above (19)Which of the following activities is considered part of a country's GDP accounts? (a)Drug trafficking (b)Prostitution (c)Plastic surgeries (d)Babysitting your sister's daughter for a week (20)The federal government in the US switched in 1992 from using: (a)GDP to the GNP to measure the US economy (b)GNP to the NDP to measure the US economy (c)GNP to the GDP to measure the US economy (d)NNP to the NDP to measure the US economy (21)A long and deep recession in the business cycle is: (a)Unemployment (b)Trough (c)Recession (d)Depression