Economics Quiz: 08/07

What does GDP stand for?

• Government Debt Percentage

• General Development Plan

• Global Demand Projection

• Gross Domestic Product

Which of the following is NOT included in the calculation of GDP?

• Value of housework performed by housewives

• Vouchers given out by Government to citizens

• Financial transactions

• Illegal activities

What is the formula for Real GDP?

• Real GDP = MONEY GDP / (GDP price deflator / 100)

• Real GDP = Pcy X Qcy

• Real GDP = Pby X Qcy

• Real GDP = GDP price deflator / 100

What is the limitation of using GDP as a measure of a country's well-being?

• It does not consider population growth

• It does not reflect the costs of growth

• It does not indicate improvements in quality of goods

• It does not account for income distribution

What is the Income multiplier effect formula?

• Multiplier = 1 / MPC

• Multiplier = 1 / MPS

• Multiplier = Change in Output / Change in AD

• Multiplier = Change in Consumption / Change in Income

What is the equilibrium in the economy when Aggregate Demand equals Aggregate Supply?

• Below full employment

• At full employment output level

• Above full employment

• At recessionary level

What is the main limitation of using Per Capita GDP as a measure of a country's well-being?

• It does not indicate improvements in quality of goods

• It does not reflect the costs of growth

• It does not account for income distribution

• It does not consider population growth

What is the formula for calculating the Economic Growth Rate?

• Economic Growth Rate = (Real GDPcy - Real GDPpy) / GDPpy * 100%

• Economic Growth Rate = (GDPcy - GDPpy) / GDPcy * 100%

• Economic Growth Rate = (Real GDPcy - Real GDPpy) / GDPpy

• Economic Growth Rate = (GDPcy - GDPpy) / GDPcy

What is the output approach used to calculate GDP?

• Calculating GDP by adding up all incomes earned by factors of production

• Calculating GDP by adding up consumption, investment, government spending, and net exports

• Calculating GDP by adding total expenditures on goods and services

• Calculating GDP by adding values of goods and services produced by industries

What is the main implication of the Recovery phase in the business cycle?

• Output increases and Unemployment Falls

• Decrease in Aggregate Supply

• High unemployment and high prices

• Fall in output and employment