Multiple Choice Questions (Answer the correct option/options)

Question 1: Suppose the economy produces only coke and hot dogs. In the current period, 400 cokes and 200 hot dogs are produced, and a coke costs $2 and a hot dog $3. Last period, the nominal GDP was 700. Which of the following is/are true? (Multiple answers are possible.) a. The economy has produced twice as much in the current period than in last period. b. The real GDP is 1400 in the current period.

c. The nominal GDP is 1400 in the current period. d. It is possible that the real GDP has decreased from last year to this year.

Question 2: Suppose that in a specific period, the economy produces $1000's worth of wheat, $2000's worth of bread, and $1500's worth of noodles. Its GDP in the current period is: (Assume that wheat is the only non-free ingredient of noodles and bread.) a. between $3500 and $4500 b. $3500 c. $4500 d. less than $3500

Question 3: The stage between the "peak" and the "trough" in a business cycle is called:

a. upswing

b. depression

c. recession

d. boom

Question 4: Which of the following arguments favour the convergence theory? (Select all applicable answers.) a. Technological advancement will help developed countries escape the law of diminishing returns. b.The law of diminishing returns implies that the more developed countries grows more slowly.

c. Developing countries can learn from the mistakes and successes of developed countries.

d. Developing countries tend to have more innovations.

Question 5: Which of the following will reduce thestructural unemployment rate? a. The rise of online training programs which offer more flexibility to learn new skills b. The removal of unemployment benefits c. The online job searching tools which shorten the search processes d. Robots replacing human labour

Question 6: Of the following, who are counted as "unemployed"? Select all answers.

a. A recent graduate who is searching for a job. b. A 45-year-old who was just laid off. c. A retired person. d. A college student who is looking for a summerinternship.

Question 7: The lower the unemployment, the more efficient the economy is. Select one:

True

False

Question 8: Hidden unemployment does not include: a. Underemployment b. Discouraged workers c. On-the-job searches d. Part-time workers who would like to work full-time

Question 9: In an economy with an adult population of 30, 18 people are working, 6 are looking for a job. The unemployment rate is__________, and the labour force participation rate is _______. a. 20%, 60% b. 25%, 80% c. 20%, 80% d. 25%, 60%

Question 10: An increase in demand, combined with a decrease in supply, can possibly cause which of the following? (Select all correct answers if there is more than one.)

Note: you will be penalized if a wrong answer is chosen, as in all multi-select questions.

a. A decrease in the equilibrium price. b. An increase in the equilibrium price. c. A decrease in the equilibrium quantity. d. An increase in the equilibrium quantity.

Question 11: An increase in the equilibrium price, combined with an increase in the equilibrium quantity, can be caused by: a. a decrease in demand b. a decrease in supply c. an increase in supply d. an increase in demand

Question 12: A higher rental price shifts down the demand curve of rental housing. Select one:

True

False