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ECS 1601 Study Unit 5 Quiz

Multiple Choice Questions (MCQ’s)

ECS 1601 Study Unit 5 Quiz Multiple Choice Questions (MCQ’s) 1. In 2009, Ozzie purchased a
  • 1. In 2009, Ozzie purchased a 1999 Opel Corsa Lite from his neighbour for his son, he purchased a 1999 Camry from Larchmont Toyota for his wife, and he bought a 2009 new Ford for himself, he also sold his 1993 Dodge Caravan. Which, if any, of these transactions will be included in GDP in 2009?

[1]

Only the purchase of the Ford

[2]

the purchase of the Ford and the Caravan

[3]

all four transactions

[4]

all three purchases but not the sale

  • 2. Study the following table and answer the question that follows.

   

2006

 

2009

Product

Price

Quantity

Price

Quantity

Camera

 
  • 10 12

100

 

120

Legal Services

 
  • 15 20

50

 

45

Books

 
  • 40 45

200

 

210

Suppose that a very simple economy produces three goods: cameras, legal services, and books. The quantities produced and their corresponding prices for 2006 and 2009 are shown in the table above. What is real GDP in 2006, using 2009 as the base year?

[1]

R28 885

[2]

R11 790

[3]

R10 275

[4]

R11 200

  • 3. Which of the following is NOT a final good?

[1]

a purse sold to a foreign visitor

[2]

a new computer sold to a UNISA student

[3]

a hot dog sold to a spectator at a Chicago Bears football game

[4]

a new car sold to Avis for use in their fleet of rental cars

  • 4. In years with inflation, nominal GDP increases

real GDP

[1]

at the same rate as

[2]

faster than

[3]

slower than

[4]

sometimes faster, sometimes slower, and sometimes at the same rate as

ECS 1601 Study Unit 5 Quiz Multiple Choice Questions (MCQ’s) 1. In 2009, Ozzie purchased a

ECS 1601 Study Unit 5 Quiz

True and False

ECS 1601 Study Unit 5 Quiz True and False 5. Indicate whether the following statements are
  • 5. Indicate whether the following statements are true/false and explain why.

 

5.1

Subsidies on products will in a difference between the price paid for a good and the cost of production and income earned by the factors of production

5.2

Double counting can be avoided by only counting the value of those sales where a good or service reaches its final destination

5.3

The production, income and expenditure methods for measuring GDP will have different results as they calculate GDP differently

 

5.4

The difference between real and nominal GDP is that certain factors of production are excluded in the calculation of nominal GDP

Long Questions

 
  • 6. Calculate the GDP for a hypothetical economy that produces two goods (computers and gasoline). The prices and quantities produced in each year are provided in the following table:

   

2006

2007

2008

 
 

Prices

Computers

R2 000

R1 900

R1 200

Petrol

R50 per liter

R100 per liter

R400 per liter

 

Quantities

 

Computers

10

16

40

Petrol

100 liters

120 liters

110 liters

6.1

Compute the nominal GDP for each of the three years.

 

6.2

Compute the real GDP for each of the three years, taking 2006 as the base year.

 

6.3

How does the real GDP in 2006 compare to the nominal GDP in 2006 when 2006 is used as the base year?

6.4

Based on your calculations, comment on the economic well-being of the above two- good economy. Have things improved over time for this country (in terms of real-GDP)?

  • 7. List the five macroeconomic objectives and describe what these objectives aim to achieve.

 
  • 8. Define the following concepts

 
 

8.1

Gross Domestic Product

8.2

Quantile Ratio

8.3

Consumer Price Index

 
  • 9. Draw a Lorenz curve and explain how the Gini Coefficient can be obtained making use of the curve

ECS 1601 Study Unit 5 Quiz True and False 5. Indicate whether the following statements are

ECS 1601 Study Unit 5 Quiz

  • 10. Study the table below and answer the questions that follow:

ECS 1601 Study Unit 5 Quiz 10. Study the table below and answer the questions that
 

2006 in

2007 in

millions

millions

Final Consumption expenditure by households

17

432

18

382

Net exports

39

456

37

325

Primary income payments to the rest of the world

20

489

19

598

Primary income payments from the rest of the world

18

563

18

456

Final consumption expenditure by government

79

489

80

258

Gross capital formation

14

569

17

598

  • 10.1 Calculate GDE for 2006 and 2007

  • 10.2 Calculate GDP for 2006 and 2007

  • 10.3 Calculate GNI at factor cost for 2006 and 2007

ECS 1601 Study Unit 5 Quiz 10. Study the table below and answer the questions that