Elimination Round (50 multiple choice questions)

1.

What is the value of all final goods and services produced within a county in a given period of time
corrected for inflation?
a. Nominal Gross National Product
b. Real Gross National Product
c. Nominal Gross Domestic Product
d. Real Gross Domestic Product

2.

What is the value of all final goods and services produced during a year by domestically owned factors
of production at current market prices?
a. Nominal Gross National Product
b. Real Gross National Product
c. Nominal Gross Domestic Product
d. Real Gross Domestic Product

3.

Which of the following is counted as part of a countrys Gross Domestic Product?

a. Net Factor Income from Abroad
b. Transfer Payments
c. Housing constructions
d. Consumption of Intermediate Goods

4.

What is National Income?

a. Gross National Product minus depreciation
b. Gross National Product minus indirect business taxes plus indirect business subsidies
c. Net National Product minus indirect business taxes plus indirect business subsidies
d. Net National Product minus depreciation

5.

What is the part of the national income that is spent freely either for consumption or saving by
households after taxes are netted out?
a. Personal Income
b. Gross Personal Income
c. Disposable Personal Income
d. Disposable Household Income

6.

Which of the following corresponds to a vertical schedule?

a. Classical aggregate demand curve
b. Classical aggregate supply curve
c. Keynesian aggregate demand curve
d. Keynesian aggregate supply curve

7.

Which of the following corresponds to a horizontal schedule?

a. Classical aggregate demand curve
b. Classical aggregate supply curve
c. Keynesian aggregate demand curve
d. Keynesian aggregate supply curve

8.

Which of the following results in an increase in the price level?

a. Increase in aggregate supply
b. Decrease in aggregate demand
c. Increase in aggregate supply and decrease in aggregate demand
d. Increase in aggregate demand and decrease in aggregate supply

9.

Which of the following results in an increase in the output level?

a. Decrease in aggregate supply
b. Decrease in aggregate demand
c. Increase in aggregate supply and increase in aggregate demand
d. Decrease in aggregate demand and decrease in aggregate supply

10. What type of unemployment results because it takes time for workers to search for the jobs that best
suit their tastes and skills?
a. Cyclical unemployment
b. Structural unemployment
c. Frictional unemployment
d. Natural rate of unemployment
11. What will happen if you deposit 100 of your currency into your checking account?
a. M2 will increase by 100
b. M1 and M2 will not change
c. M1 will decrease by 100 and M2 will increase by 100
d. M1 will increase by 100 and M2 will decrease by 100

12. When the real interest rate is low, there are greater incentives to ______ and fewer incentives to
______?
a. Lend, borrow
b. Borrow, lend
c. Lend, save
d. Save, lend
13. What is the interest rate on the loans that the central bank makes to banks?
a. Inflation rate
b. Exchange rate
c. Discount rate
d. Deposit rate
14. What is the increase in the value of the domestic currency relative to the currencies of other countries
when exchange rates are fixed?
a. Depreciation
b. Devaluation
c. Appreciation
d. Revaluation
15. What is
a.
b.
c.
d.

the Fisher effect?

Expected inflation rises, interest rates rises
Expected inflation rises, interest rates falls
Expected inflation falls, interest rates rises
Unemployment rises, interest rates rises

16. What economic concept explains how deflation can stimulate output and employment during times of
recession?
a. Crowding-out Effect
b. Fisher Effect
c. Hicksian Effect
d. Pigou Effect
Table 1
Gross Domestic Product (GDP)
Net Factor Income From Abroad (NFIFA)
Depreciation
National Income
Personal Income
Personal Taxes

1 000 000
250 000
200 000
500 000
150 000
75 000

17. What is the Gross National Product (GNP)?

a. 1 250 000
b. 1 200 000
c. 800 000
d. 750 000
18. What is the Net Domestic Product (NDP)?
a. 1 250 000
b. 1 200 000
c. 800 000
d. 750 000
19. What is the Disposable Personal Income (DPI)?
a. 100 000
b. 75 000
c. 50 000
d. 25 000
20. Given a personal consumption of 50 000, what is personal saving?
a. 100 000
b. 75 000
c. 50 000
d. 25 000
Table 2
Year
2010
2011

Price of X
2
4

Quantity of X
100
110

Price of Y
9
12

Quantity of Y
20
30

2012

150

15

21. What is the nominal GDP for the year 2011?

a. 380
b. 750
c. 800
d. 1500
22. What is the real GDP for the year 2012 using 2010 as the base year?
a. 380
b. 750
c. 800
d. 1500
23. What is the GDP deflator for the year 2012?
a. 106.67
b. 2
c. 106.67
d. 200
Table 3
Population of working age
Employed
Unemployed
Not in labor force
24. What is the total labor force?
a. 200 000
b. 170 000
c. 150 000
d. 120 000
25. What is the unemployment rate?
a.
5%
b. 10 %
c. 15 %
d. 20 %
26. What is the labor-force participation rate?
a. 50 %
b. 60 %
c. 75 %
d. 80 %

200 000
120 000
30 000
50 000

50