ECON Test 3

1. In the year 2045, Yuni is studying the effect of futuristic government policies on the economy. She learns about the concept of ‘crowding out’, which refers to:

• The impact of increased government borrowing leading to reduced investment in the private sector
• The increase in private sector productivity due to government spending
• The inflation caused by high consumer demand
• The reduction in unemployment due to fiscal stimulus

1. In a futuristic classroom, Ina asked “what does GDP measure in our advanced economy where technology and sustainability are prioritized?”

• The total market value of all final goods and services produced within a country in a year
• The national income after taxes and subsidies
• The net exports of a country
• The value of intermediate goods traded domestically

1. In the year 2045, as Rani’s government faces rising prices in the economy, which policy would she most likely implement to combat inflation?

• Increasing interest rates
• Reducing government expenditure
• Subsidizing essential goods
• Increasing public sector wages

1. In a futuristic economy where digital currencies dominate, Rudi explained the quantity theory of money using the equation:

• MV = PQ

• Demand-Supply Equilibrium
• Purchasing Power Parity
• Keynesian Multiplier

1. In the year 2040, Rahman is analyzing the impact of a significant depreciation of his country’s currency on international trade. How does this depreciation affect the country’s exports and imports?

• Exports increase and imports decrease
• Both exports and imports increase
• Imports increase and exports decrease
• No impact on trade

1. Dedi is exploring how the concept of ‘elasticity’ applies to price changes in the futuristic market for virtual reality video games

• It measures the responsiveness of quantity demanded to price changes
• It shows how much price increases with supply
• It refers to the inelasticity of essential goods
• It measures government control on pricing

1. In the year 2045, Nur discovered that the elasticity of demand for eco-friendly tissues is 0.66. This means the demand for these tissues is:

• Inelastic
• Elastic
• Unit elastic
• Unrelated

1. In the year 2040, Rina has up graded her small bakery with advanced technology. As she increases the number of cakes she bakes using automated system, which of the following short- run cost continues to decrease?

• average fixed cost

• variable cost

• fixed cost remains constant

• It becomes zero

1. In a futuristic world where Rina has decided to halt production of her innovate gadgets for a while, her cost will be her______

• Fixed Cost
• Variable Cost
• Marginal Cost
• Total Cost

1. In the context of market structures, which characteristic is most associated with perfect competition?

• many buyers and sellers with identical products

• Highly differentiated products
• Luxury products only
• Government-subsidized goods