Question 11 pts

Damian shares a small food truck with his sister. His share of the expenses is $500 per month. He has decided to get his own, newer food truck which he will not have to share with anyone. His expenses for the newer truck are $1400 per month. Damian is as rational as any other person. As an economics major, you rightly conclude that________.

Group of answer choices

the cost of having one's own truck outweighs the benefits

Damian figures that the benefit of having his own truck (as opposed to sharing) is at least $1 400

Damian figures that the additional benefit of having his own truck (as opposed to sharing) is at least $900

Damian cannot afford the newer truck and will have to go back to sharing a truck with his sister

Flag question: Question 2Question 21 pts

Door Plus sells new and used doors to various customers, including contractors and homeowners. Out of the FOUR (4) transactions listed below, which would be counted as part of GDP?

Group of answer choices

Door Plus sells a used door to a homeowner

Door Plus sells a used door to a contractor, who would then install it into a new home for his customer.

Door Plus sells a new door to a homeowner

Door Plus sells a new door to a contractor, who would then install it into a new home for his customer.

Flag question: Question 3Question 31 pts

Payments from the government to welfare recipients (e.g., unemployment benefit, age pension, family tax benefit) are generally call transfer payments. Which of the following statement is true about transfer payments?

Group of answer choices

GDP does NOT include transfer payments because such payments do not involve in the creation of new goods and services

GDP does include transfer payments as such payments are a part of government purchases

None of the above

GDP would only include transfer payments if the market value of such payments can be measured accurately.

Flag question: Question 4Question 41 pts

Regina paid $1 million to buy a brand new Ferrari. The car was imported to Australia from Italy. Which of the following statement is true?

Group of answer choices

GDP would decrease by $1 million since this car is an import. Net Exports (=Export - Imports) would decrease by $1 million, causing a drop in GDP.

GDP would stay unchanged because the car was produced in Italy. No production took place in Australia.

None of the above

GDP would increase by $1 million since this car purchase is counted as part of consumption

Flag question: Question 5Question 51 pts

Felix managed to save $30,000 in 2022. He's contemplating what to do with this money. There are two options available. Felix could either hold the entire amount of his savings as money. Or he could use the funds to purchase government bonds, which would earn him a real return of 3 percent. The expected inflation rate is 4 percent. In case he elects to hold his savings as money, how much would be the opportunity cost of holding money for Felix?

Group of answer choices

1%

4%

3%

7%

Flag question: Question 6Question 61 pts

It's November, 2022. Alex has just completed his bachelor degree at Swinburne. He's searching day and night for a job. However, Alex can only start in 2 months after completing his volunteer stint in Bangkok. What would be Alex's current employment status?

Group of answer choices

Employed, because he's working as a volunteer in Bangkok

Unemployed, because he's not working in paid employment

Not in the labour force, because he cannot start immediately

As far as Australia is concerned, Alex does not hold any employment status because he's currently overseas

Flag question: Question 7Question 71 pts

Labour force data for a certain month in 2021 are as follows: Working age population = 20.91 million Labour force = 13.8 million Number of employed people = 13.04 million Number of unemployed people = 0.76 million

What is the unemployment rate during the month?

Group of answer choices

3.78%

5.70%

5.51%

3.63%

Flag question: Question 8Question 81 pts

Consider FOUR (4) scenarios below. Which scenario constitutes an example of frictional unemployment?

Group of answer choices

With the economy slipping into a recession, the Kmart store, where Liam worked, went on downsizing. Liam lost his job as a result.

Seth used to work as a line umpire on the international tennis tour. He'd been out of work since the tour replaced line umpires with an automatic line calling system

Xavier had 30 years of experience, working as a car factory worker under his belt. He's been struggling to find work since the last car factory in Australia was shut down in 2017.

Lucas quit his job in Bacchus Marsh, Victoria to relocate Brisbane, Queensland. He's now actively looking for work in Brisbane.

Flag question: Question 9Question 91 pts

Consider FOUR (4) scenarios below. In which scenario would "cost-push inflation" arise?

Group of answer choices

Short-run aggregate supply happens to increase, which pushes prices higher

Australia exports more coal and gas to European countries, causing prices to rise

Households consume more and firms invest more, which pushes prices higher

Unions successfully compel firms to raise real wages for workers significantly

Flag question: Question 10Question 101 pts

Bruno lends Vu $10,000 for one year. The nominal interest rate is set at 10%. The CPI (Consumer Price Index) climbs from 180 to 190 during the year. The real interest rate Bruno would earn from this loan would be:

Group of answer choices

7.5%

0%

5%

4.5%

Flag question: Question 11Question 111 pts

Consider FOUR (4) scenarios above. Which scenario represents a "negative supply shock"?

Group of answer choices

An improvement in technology

An unexpected large increase in the price of natural gas

A decline in wages

Firms increase investment, causing the capital stock to rise

Flag question: Question 12Question 121 pts

Suppose that the Australian economy has just emerged from a recession and is beginning to grow again. What do you think would happen to the unemployment rate?

Group of answer choices

The unemployment rate will definitely decrease as more jobs will be created thanks to a recovery in aggregate demand.

The change in unemployment rate depends on the causes behind the previous recession and the subsequent expansion.

None of the above. (i.e., All of the above answers are incorrect)

The unemployment rate may keep increasing for many months even though the economy has already started to recover due to the effects caused by discouraged workers and firms' reluctance to hire.

Flag question: Question 13Question 131 pts

Suppose the Australian economy is experiencing an unexpected spell of high inflation with prices rising significantly more than anticipated. How would the aggregate demand (AD) curve be affected?

Group of answer choices

Unusually high inflation renders Australian goods more expensive and less competitive in the international market. Consequently, the AD curve shifts LEFT due to a fall in net exports

Rising prices lead to a fall in consumption. Given consumption accounts for two-third of aggregate demand in Australia, the AD curve will shift LEFT following a drop in consumption.

Unusually high inflation renders Australian goods more expensive and less competitive in the international market. Consequently, the AD curve shifts RIGHT due to a fall in net exports

Rising prices lead to a movement along the AD curve. The AD curve does NOT shift.

Flag question: Question 14Question 141 pts

Suppose trade unions successfully pressure firms to increase workers' wages by 15%. How would the aggregate supply be impacted as a result?

Group of answer choices

Wages account for a large proportion of firms' cost of production. As a result, the short-run aggregate supply decreases while the long-run aggregate supply remains unchanged.

Wages account for a large proportion of firms' cost of production. As a result, both the short-run and long-run aggregate supply decrease.

None of the above (i.e., All of the above answers are incorrect)

Wages account for a large proportion of firms' cost of production. As a result, the short-run aggregate supply decreases. If wages continue to surge for more than a year, the long-run aggregate supply will decrease as well.

Flag question: Question 15Question 151 pts

Suppose the economy is at full employment and firms become more optimistic about the future profitability of new investment. In the short run

Group of answer choices

prices will decline.

aggregate demand will shift to the left.

unemployment will decline.

output will decline.