Select all positive statements from below.

Question 1Answer

a. The Central Bank's decision to increase the policy interest rate is inappropriate .

b. It's the right time to increase the policy interest rate! c. Overall consumer debt is on the rise. d. The economy is facing many challenges at this moment. e. High inflation rates drive up necessity expenses.

Suppose country A can produce 10000 tons of cheese, or 5000 bottles of wine within a month, and country B can produce 4000 tons of cheese, or 1000 bottles of wine within a month. Select all correct statements below.

Question 2Answer

a. Country A has absolute advantage over cheese b. Country B has comparative advantage over cheese c. Country B has absolute advantage over cheese d. Country A has comparative advantage over cheese

In a country that produces cheese and wine, as the prices of cheese and wine change, the country's PPF (production possibilities frontier) will shift.

Question 3Select one:

True

False

Due to the law of diminishing returns, the PPB tends to be _________________ as we move to the right.

Question 4Answer

a. first steeper and steeper, then flatter and flatter

b. steeper and steeper

c. flatter and flatter

d. constantly-sloped

Which of the following can cause the PPB to shift inward?

Question 5Answer

a. A natural disaster

b. Innovations

c. Immigrates coming to this economy

d. Higher productivity

An example of an item that would beexcludedfrom a measure of GDP from the expenditure side is

Question 6Answer

a.government pension payments to a retired person.

b.fertilizer purchased by Farmer Jones to increase crop yields.

c.buying tomato plants for your garden.

d.the purchase of windows by an automobile assembly plant.

e.a new truck purchased by a furniture-delivery company.

GDP from the expenditure side is equal to the sum of

Question 7Answer

a.C_a+I_a+G_a+ (X_a-IM_a).

b.C_a+I_a+ net exports.

c.C_a+I_a+G_a+ (IM_a-X_a).

d.C_a+I_a+G_a- net exports.

e.C_a+I_a+G_a.

In Lumberville, the lumberjack cuts trees and sells them to the local mill for $500. The local mill processes these trees into wood planks and sells them to the carpenter for $800. Finally, the carpenter uses these wood planks to make tables which he sells for $1400 to Lumberville's residents. If we allowed double counting, the total value of Lumberville's output would be calculated as ________. But if we correctly compute the total value added, the value of the total output in Lumberville would be ________.

Question 8Answer

a.$2200; $4200

b.$1400; $1400

c.$2200; $2700

d.$4200; $2700

e.$2700; $1400

The real GDP can be greater than, equal to, or less than the nominal GDP.

Question 9Select one:

True

False

When calculating GDP from the expenditure side, which of the following is true of the investment component, I_a?

Question 10Answer

a.It includes the transfer of houses between individuals.

b.It only includes decumulation of inventories.

c.It includes changes in inventories.

d.It only includes business fixed investment.

e.It excludes expansions of existing factories.

Which of the following is equivalent to real GDP?

Question 11Answer

a.the money value of all goods and services produced in an economy per year plus imports

b.the market value of all goods and services produced in an economy per year

c.the nominal value of all goods and services in an economy per year

d.the value of all final goods and services produced in an economy per year adjusted for price changes

e.personal disposable income plus depreciation

Which of the following is included in current calculations of GDP?

Question 12Answer

a.volunteer work

b.welfare payments

c.the value of vegetables consumed by the home gardener

d.computers produced here and exported to Europe

e.the value of a vintage automobile purchased from the previous owner

Why are illegal activities, unreported activities, and non-market activities excluded from GDP?

Question 13Answer

a.They are morally repugnant.

b.They do not contribute to human welfare.

c.They do not have an opportunity cost.

d.The do not contribute to the true national output of goods and services.

e.They are difficult to measure.

Can you please solve the above MCQ'S. Please give accurate answers and correct.