uestion1

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Which one of the three (3) approaches used to calculate Gross Domestic Product, is oftentimes referred to as the Value Added Approach?

a.

Income Approach

b.

Gross National Product

c.

Output Approach

d.

Expenditure Approach

Question2

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If both Nominal and Real Gross Domestic Products are equal, then, it is fair to assume that:

a.

Inflation was zero

b.

No price increase occurred

c.

No economic growth occurred

d.

No price reduction occurred

Question3

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The period of the business cycle in which real Gross Domestic Product isincreasingis

a.

Peak

b.

Recession

c.

Expansion

d.

Trough

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A type of unemployment in which workers are in-between jobs or are searching for new and better jobs is called _______ unemployment:

a.

Cyclical

b.

Structural

c.

Turnover

d.

Frictional

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Which of the followingdoes nothappen during periods of stagflation?:

a.

An increase in unemployment

b.

An inward shift of the Aggregate Supply Curve

c.

Inflation

d.

Economic growth

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Which institution measures and publishes Jamaica's inflation rate?

a.

The Statistical Institute of Jamaica (STATIN)

b.

The Bank of Jamaica (BOJ)

c.

The Office of the Prime Minister (OPM)

d.

The Planning Institute of Jamaica (PIOJ)

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If Leakages are greater than Injections:

a.

aggregate demand will be equal to aggregate supply.

b.

the levels of income, output, expenditure & employment will fall causing a recession or contraction in the overall economic activity.

c.

the levels of income, output, expenditure and employment will rise causing a boom or expansion in economic activity.

d.

inflation is likely to occur.

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A .........................is the amount by which the equilibrium level of real GDP falls short of potential GDP.

a.

recessionary gap

b.

depressionary gap

c.

45 degree line

d.

inflationary gap

Question9

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Disposable income can be defined as national income

a.

minus taxes plus transfers.

b.

minus indirect taxes

c.

plus taxes plus transfers.

d.

minus government taxes

uestion10

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If Ms. Smith purchases a government bond, will this transaction be counted in the national Income calculations.

a.

Yes, if the purchase is made out of current income.

b.

No, unless the funds are deposited in a domestic financial institution

c.

Yes, if it is a domestic mutual fund.

d.

No, it would not be included.

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Government spending is an injection into the "circular flow" in the sense that it:

a.

decreases the amount of taxes paid.

b.

increases the amount of total spending

c.

increases the size of the national deficit.

d.

decreases the amount of household spending

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Which of the following would be counted as investment in the national income accounts?

a.

The purchase of a newly built house

b.

The purchase of a newly issued corporate bond.

c.

The payment of tuition at a private college

d.

The purchase of a newly minted coin

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In 2019, Mr. Francis paid $10m for a house that was built in 2019 and sold that year for $8m. What value will this transaction add to GDP in 2020?

a.

$10m

b.

$2m

c.

$0

d.

$8m

Question14

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Jamaica's aggregate demand is influenced by?

a.

Government policies

b.

Price level

c.

All of the above

d.

Global occurrences: Oil, War, Catastrophes (Tsunami, etc.

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An intended goal of expansionary fiscal and monetary policy is

a.

A decrease in interest rates.

b.

Increasing aggregate output

c.

A decrease in the price level

d.

The equalization of the distribution of income

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At an income of $100,000, you spent $90,000 on consumer goods.When your income rose to $200,000, you spent $160,000 on consumer goods.Yourmarginal propensity to consumeis:

a.

1

b.

0.7

c.

0.9

d.

0.8

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The amount of goods and services the economy could produce if the labour force is fully employed is called

a.

nominal GDP

b.

potential GDP

c.

actual GDP

d.

real GDP

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IfPaul cannot find a job because his job skills have become obsolete, then; this is an example of?

a.

structural unemployment

b.

seasonal unemployment.

c.

frictional unemployment

d.

cyclical unemployment

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One of the signs of a healthy economy is a(n)

a.

declining real GDP

b.

increasing real GDP

c.

rising price level

d.

falling price level

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What items are included when calculating GDP using the income method?

a.

Rent, wages, tax, interest

b.

Rent, tax, subsidy, profit

c.

Rent, Interest, profit, wages

d.

Rent, subsidy, pension, education

Question23

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Identify the types of unemployment covered in this course

a.

Cyclical, Seasonal, Real Wage, Technological

b.

Frictional, Seasonal, Structural, Cyclical

c.

Frictional, Seasonal, structural, Technological

d.

Real wage, Seasonal, Frictional, Structural

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List Two economic (2) problems facing developing economy with high unemployment levels.

a.

Loss of human capital and Loss of output

b.

Loss output, andCrime and violence

c.

Decline in health levels andLoss of human capital

d.

Anxiety and depression,and Suicide

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List any three (3) methods that the government may use to alleviate problems associated with high unemployment?

a.

reduction in tax rates, decrease exports, Import less

b.

reduction in tax rates, Increase exports, Import more

c.

Unemployment insurance , Social welfare programs (unemployment benefits), sell property

d.

Increase government spending , reduction in tax rates, Increase exports

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What economic problem is the graph below showing?

a.

Recession

b.

Inflation

c.

Growth

d.

Stagflation

Question27

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Market Basket of Goods between 2018 and 2020

Years

2018

2019

2020

Cars

500,000

600,000

620,000

Groceries

200,000

220,000

300,000

School

200,000

100,000

150,000

Bills

100,000

130,000

30,000

The Table above contains information that is representative of a typical economy's "market basket of goods". Using 2018 as the base year, compute the following:

a)The Consumer Price Index (CPI) for 2018, 2019 and 2020

a.

100, 105, 110

b.

110, 115, 120

c.

100, 105, 115

Question28

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Market Basket of Goods between 2018 and 2020

Years

2018

2019

2020

Cars

500,000

600,000

620,000

Groceries

200,000

220,000

300,000

School

200,000

100,000

150,000

Bills

100,000

130,000

30,000

The Table above contains information that is representative of a typical economy's "market basket of goods". Using 2018 as the base year, compute the following:

b)The inflation rate for 2019 and 2020

a.

5.0%, 4.8%

b.

4.6%, 4.8%

c.

0%, 5.0%

d.

3.6%, 4.6%