Principles of Economics (7)

What is macroeconomics about?

• It is about economic growth

• It is about inflation

• It is about unemployment

• All above

Why might macroeconomics be relevant to businesses?

• Because business needs to know what to produce.

• Because business needs to know how to produce.

• Because business need to know for whom to produce.

• Because business needs information such as interest rate, inflation rate, unemployment rate, wage rate, government policy, exchange rate, economic growth rate ect.

How is GDP defined?

• GDP is the market value of final goods and services produced in a country over a period of time.

• GDP is the quantity of the good and services produce in a country over a period of time.

• GDP is a measure of economic activity.

• GDP is gross domestic product.

A country has Consumption = 300, Investment =100, Government expenditure = 100, import = 100, export = 100, What is its GDP?

• GDP = 700

• GDP = 500

• GDP = 600

• GDP = 400

For a country produces 10 cars at price of $50000 and 100 computers at price of 1000 in 2015. What is the GDP of 2015?

• $600000

• $500000

• $100000

• not enough information.

For a country produced 10 cars at price of $50000 and 100 computers at price of 1000 in 2015. In 2016 the the country produced the same amount of cars and computers, but the car price increased to 50500 and computer price decreased to 900. What is the real GDP in 2016 (using 2015 as base year)?

• $600000

• $550000

• Not enough information

For a country produced 10 cars at price of $50000 and 100 computers at price of 1000 in 2015. In 2016 the the country produced the same amount of cars and computers, but the car price increased to 50500 and computer price decreased to 900. What is the economic growth rate of 2016?

• 1%

• 10%

• 0%

• not enough information

During the boom phase of a business cycle the durable goods will__________, the inflation will __________, unemployment will ________ and the interest rate will_________.

• decrease, increase, increase, decrease.

• decrease, decrease, increase, increase.

• increase, increase, increase, decrease.

• increase, increase, decrease, increase.

During the contraction phase of a business cycle the durable goods will__________, the inflation will __________, unemployment will ________ and the interest rate will_________.

• decrease, increase, increase, decrease.

• decrease, decrease, increase, decrease.

• increase, increase, increase, decrease.

• increase, increase, decrease, increase.

During the expansion phase of a business cycle the durable goods will__________, the inflation will __________, unemployment will ________ and the interest rate will_________.

• decrease, increase, increase, decrease.

• decrease, decrease, increase, decrease.

• increase, increase, decrease, increase.

• increase, decrease, decrease, increase.