ECO403 Macroeconomics Quiz No. 1 Solution and Discussion Fall 2014


Disposable Personal income is equal to personal income minus------------

Personal taxes.

Indirect business taxes.

Capital consumption allowance.

Income earned but not received.



Which one of the following is correct?


M * V = P + Y

M * V = P * Y

M + V = P – Y

M * V = P/ Y



Which of the following best describes the definition of money?

The stock of assets used for transactions.

The number of dollars in the hands of the public.

A store of value, a unit of account, and a medium of exchange.

All of the given options.



National saving is equal to ---------.

Y – C + G

Y – C – G

Y + C – G

Y + C + G



Assume the first three units of labor input generate corresponding total outputs of 700, 770 and 830. The marginal product of the second unit of labor is:



70

700

770

1470

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The GDP deflator can be used:





In a given year, a country's exports total Rs39 million & imports are Rs17 million. Its net exports are:




Rs.56 million.

Rs. 39 million.

Rs. +22 million.

Rs. - 2 million.



GNP is $750 billion and depreciation is $200 billion, then net national product:



Is $550 billion.

Is $640 billion.

Is $950 billion.

Cannot be determined from this information.



The quantity of money in an economy is Rs.7 million, and the velocity of circulation is 3. GDP in this economy is------------- million.

4

-4

7

21



If an economy has population of 20 million people, 10 million unemployed and 7 million employed, 5 million adult populations, the labor force participation rate is:




17/5 *100

20/5*100





The _______ rate is equal to the number of _______ divided by the _______multiply by 100.




Unemployment; unemployed; labor force

Unemployment; employed; labor force

Employment; unemployed; labor force

Labor force participation; Adult population; labor force



Economics is a __________word.

Latin.

Greek.

English

None of given options.





Human wants are:



Always fixed.

Limited.

Unlimited.

Likely to decrease over time.



If consumer incomes increase, the demand for commodity “k”:



Will shift to the left.

Will shift to the left than right.

Will shift to the right.

Will necessarily remain unchanged.