ECO121

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Student Information
Name: TRAN SON TUNG Roll number: HS150574
Room No: ECO121 Class:

FOR TEACHER ONLY

MARK MARKED BY Signature of Proctor
(NAME AND SIGNATURE)

Quizz 01
Multiple choices

1) The equation for GDP using the expenditure approach is

A) GDP = C + I + G + EX - IM.
B) GDP = C + I + G + (IM - EX).
C) GDP = C + I + G + EX + IM.
D) GDP = C + I + G - EX - IM.

Refer to the information provided in Table 6.1 below to answer the questions that follow.
2) Refer to Table 6.1. Personal consumption expenditures in billions of dollars are
A) 1,000.
B) 1,300.
C) 1,500.
D) 1,650.

3) Refer to Table 6.1. The value for gross private domestic investment in billions of dollars is
A) 300.
B) 375.
C) 325.
D) 450.

4) Refer to Table 6.1. The value for net exports in billions of dollars is
A) 350.
B) 250.
C) 650.
D) 800.

5) Refer to Table 6.1. The value of gross domestic product in billions of dollars is
A) 3,000.
B) 2,875.
C) 3,125.
D) 3,750.

6) Refer to Table 6.1. The value of government spending in billions of dollars is

A) 100.
B) 200.
C) 300.
D) 550.

7) When calculating GDP, exports are ________ and imports are ________.
A) added; added
B) added; subtracted
C) subtracted; added
D) subtracted; subtracted

8) If the value of net exports is negative, then

A) exports exceed imports.
B) imports exceed exports.
C) exports equal imports.
D) imports are zero.
9) What should be subtracted from GDP to calculate national income?
A) depreciation
B) indirect taxes
C) personal income taxes.
D) net factor payments to the rest of the world

10) What type of tax affects the amount of money you pay for a product?
A) direct tax
B) income tax
C) indirect tax
D) all of the above

11) The personal saving rate is

A) the difference between total personal spending and personal saving.
B) the difference between personal income and disposable personal income.
C) the ratio of personal income to personal saving.
D) the percentage of disposable personal income that is saved.

12) If disposable personal income is $400 billion and personal saving is $8 billion, the personal saving rate
is
A) 1.5%.
B) 2%.
C) 5%.
D) 12%.

13) If the personal saving rate is 5% and personal saving is $10 billion, the value of personal
disposable income
A) is $100 billion.
B) is $200 billion.
C) is $500 billion.
D) cannot be determined from this information.

14) The GDP deflator is the

A) difference between real GDP and nominal GDP multiplied by 100.
B) difference between nominal GDP and real GDP multiplied by 100.
C) ratio of nominal GDP to real GDP multiplied by 100.
D) ratio of real GDP to nominal GDP multiplied by 100.

15) If nominal GDP is $8 trillion and real GDP is $6 trillion, the GDP deflator is
A) 48.
B) 75.
C) 133.33.
D) 480.

16) The productivity of workers is defined as the

A) total output produced by the labor force.
B) output produced by a worker per hour.
C) number of hours a worker spends at work.
D) number of workers needed to produce one dayʹs volume of output.

17) The capital per worker ratio is a measure of

A) how many tools or machines each worker has to work with.
B) how productive workers are.
C) how much GDP is growing.
D) how much borrowed money is needed per worker.

18) Productivity is the ratio of

A) total output to the total number of worker hours.
B) total output to the total population.
C) total output to the total number of unemployed.
D) total capital to the total number of workers.

19) For you to be considered out of the labor force, you can be
A) a full-time student.
B) a full-time retiree.
C) a full-time volunteer.
D) any of the above

20) Cheryl graduated from college a month ago and is now without work. She accepted a job that will start
next month. Today, Cheryl is
A) not in the labor force.
B) in the labor force.
C) employed.
D) a discouraged worker.

21) The number of people unemployed equals

A) the number of people employed minus the labor force.
B) the labor force plus the number of people employed.
C) the labor force minus the number of people employed.
D) the number of people employed divided by the labor force.

22) Which of the following increases the real interest rate?

A) a decrease in the nominal interest rate, holding the inflation rate constant
B) an increase in both the nominal interest rate and the inflation rate by the same percentage points
C) a decrease in the inflation rate, holding the nominal interest rate constant
D) a decrease in both the nominal interest rate and the inflation rate by the same percentage points

23) If Mr. Garrison is paid an interest rate of 4% on his savings, but the inflation rate is 7%, the real interest
rate Mr. Garrison earns is
A) 4%.
B) -3%.
C) -7%.
D) 28%.
24) You want to make a 10% real return on a loan that you are planning to make, and the expected inflation
rate during the period of the loan is 4%. You should charge a nominal interest rate of
A) 6%.
B) -6%.
C) 10%.
D) 14%.

25) Lola wants to make an 6% real return on a loan that she is planning to make, and the expected inflation
rate during the period of the loan is 5%. She should charge an interest rate of
A) 6%.
B) 16%.
C) 11%.
D) 1%.

26) Suppose that private saving is $1590 billion, investment is $1945 billion, and the current account
balance is -$489 billion. From the uses-of-saving identity, how much is government saving?
A) -$134 billion
B) -$844 billion
C) $844 billion
D) $134 billion

27) Suppose that national saving is $1456 billion, investment is $1945 billion, and private saving is $1590
billion. How much is the current account balance?
A) $489 billion
B) $221 billion
C) -$221 billion
D) -$489 billion

28) In the mid-to-late 1980s, the United States had "twin deficits" because both ________ and ________
were negative.
A) government saving; private saving
B) saving; investment
C) the current account; investment
D) government saving; the current account

29) Government statisticians adjust GDP figures to include estimates of

A) the value of homemaking (work done within the home).
B) the underground economy.
C) child-rearing services provided by stay-at-home parents.
D) the costs of pollution to society.

30) Because government services are not sold in markets,

A) they are excluded from measurements of GDP.
B) the government tries to estimate their market value and uses this to measure the government's
contribution to GDP.
C) they are valued at their cost of production.
D) taxes are used to value their contribution.
31) Intermediate goods are
A) capital goods, which are used up in the production of other goods but were produced in earlier periods.
B) final goods that remain in inventories.
C) goods that are used up in the production of other goods in the same period that they were produced.
D) either capital goods or inventories.

32) Capital goods are

A) a type of intermediate good.
B) final goods, because they are not used up during a given year.
C) produced in the same year as the related final good, whereas intermediate goods are produced in
different years.
D) produced in one year, whereas final goods are produced over a period of more than one year.

33) Marvin's Metal Company produces screws that it sells to Ford, which uses the screws as a component of
its cars. In the national income accounts, the screws are classified as
A) inventory.
B) final goods.
C) capital goods.
D) intermediate goods.

34) Larry's Lathe-makers Limited produces lathes, which are purchased by furniture manufacturers all over
the world. The standard lathe depreciates over a twenty-five year period. In the national income accounts,
the lathes are classified as
A) inventory.
B) raw materials.
C) capital goods.
D) intermediate goods.

35) Fred the farmer purchased five new tractors at $20,000 each. Fred sold his old tractors to other farmers
for $50,000. The net increase in GDP of these transactions was
A) $50,000.
B) $100,000.
C) $125,000.
D) $150,000.

36) Inventories include each of the following except

A) unsold finished goods.
B) goods in process.
C) raw materials held by firms.
D) office equipment.