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1) Real GNP is a crude measure of national welfare because it excludes ? a. consumption b. investment c. exports d. work in the home
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2) Nominal GNP measures income ? a. At the present time b. corrected for tax changes c. corrected for changes in interest rates d. At current prices
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3) Injection into the circular flow are ______ and __________? a. consumption investment exports b. investment exports transfer payments c. investment government expenditure exports d. taxes exports, transfer payments
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4) In the economy when a steel producer sells steel to car producer it is regarded as ? a. a final good b. an intermediate good c. an injection d. a leakage
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5) The key issues of macroeconomics are ? a. unemployment b. inflation c. economic growth d. All of the above
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6) Purchasing power parity exchange rates are used to ? a. compare living standards of different countries b. pay wages b multinational companies c. estimate the costs of economic growth d. convert nominal GDP to real GDP
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7) Real GDP is nominal GDP measured in constant ? a. taxes b. prices c. exchange rates d. interest rates
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8) Total injection are made up of? a. investment + tax + exports b. savings + government expenditure + exports c. investment + government expenditure + imports d. investment + government expenditure + exports
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9) Aggregate demand includes only ? a. consumer expenditure government expenditure and investment b. consumer expenditure investment government expenditure and exports less imports c. consumer debt investment debt and government debt d. consumer expenditure and investment
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10) The length of a business cycle would be measured from ? a. the slump to the expansion b. peak to peak c. peak to trough d. trough to peak
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11) An index of prices of all domestically produced goods in the economy is the ? a. wholesale price index (WPI) b. Consumer price index (CPI) c. GDP deflator d. Producer price index (PPI)
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12) Macroeconomic theory that emphasized the theories of Keynes and de-emphasized the classical theory developed as the result of the failure of ? a. economic theory to explain the simultaneous increases in inflation and unemployment during the 1970s b. The classical model to explain the prolonged existence of high unemployment during the Great Depression c. fine tuning during the 1960s d. the economy to grow at a rapid rate during the 1950s
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13) Macroeconomics is the branch of economics that deals with ? a. imperfectly competitive markets: b. Only the long run adjustments to equilibrium in the economy c. The functioning of individual industries and the behavior of individual decision-making units business firms and households d. the economy as a whole
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