ECO216 Macroeconomics Ch 8-9

If U.S. GDP is 5 trillion, income received from other countries is 0.5 trillion and income paid to other countries is 0.3 trillion, what is the U.S. GNP? A. 5.2 trillion B. 5.8 trillion C. 4.2 trillion D. 4.8 trillion

A. 5.2 trillion

If U.S. GDP is 5 trillion, income received from other countries is 0.5 trillion and income paid to other countries is 0.3 trillion, what is the U.S. GNP? A. 5.2 trillion B. 5.8 trillion C. 4.2 trillion D. 4.8 trillion

A. 5.2 trillion

If there is a tax cut, A. AD will shift right B. AD will shift left C. real GDP goes up by a movement along the same AD D. real GDP goes down by a movement along the same AD

A. AD will shift right

Which one is an example of investment spending? A. Sam purchased a new home B. Sam purchased some newly issued IBM stocks C. Sam purchased an old machine for his business D. Sam purchased some IBM stocks from the secondary market

A. Sam purchased a new home

What are transfer payments? A. They are grants to some people B. They are wages to some people C. They are transferred income from foreign countries D. They are transferred income to foreign workers

A. They are grants to some people

If Canadian economy is strong, A. our export goes up B. our export goes down C. our net export is unaffected D. Canada will import less from us

A. our export goes up

If Canadian economy is strong, A. our export goes up B. our export goes down C. our net export is unaffected D. Canada will import less from us

A. our export goes up

Multiplier process in the economy does not work properly, if A. people save all their income and do not spend B. people spend all their income C. people do not pay enough wage to workers D. the tax rate is too low

A. people save all their income and do not spend

If price level goes down, A. purchasing power of people goes up B. purchasing power of people goes down C. everything is costlier than before D. people feel themselves poorer than before

A. purchasing power of people goes up

If MPC = 0.8 and change in disposable income is $1000, what is the change in consumption? A. $1250 B. $800 C. $1000.80 D. $0.0008

B. $800

Which one is the largest component of aggregate demand in U.S.A.? A. Investment spending B. Consumer expenditure C. Government purchases because we have a large armed force D. Net export

B. Consumer expenditure

Net National Product equals A. GNP+depreciation of capital B. GNP-depreciation of capital C. GDP-depreciation of capital D. GDP+depreciation of capital

B. GNP-depreciation of capital

National income equals A. wage+inflation+rent+profit B. wage+interest+rent+profit C. wage+interest+rent+import D. wage+interest+rent+export

B. wage+interest+rent+profit

National income= A. wage+interest+profit B. wages+interest+rent+profit C. wages+interest+inflation+profit D. wages+interest+export+import

B. wages+interest+rent+profit

If interest rate goes up, A. your investment on housing is not affected B. you will invest less on housing C. you will invest more on housing D. the house rent also goes up

B. you will invest less on housing

If interest rate goes up, A. your investment on housing is not affected B. you will invest less on housing C. you will invest more on housing D. the house rent also goes up

B. you will invest less on housing

Suppose the value of investment multiplier in the economy is 5. What does it mean? A. If investment goes up by $5, real GDP goes up by $1 B. If investment goes up by $1, real GDP goes up by $4 C. If investment goes up by $1, real GDP goes up by $5 D. If investment goes up by $1, real GDP goes down by $5

C. If investment goes up by $1, real GDP goes up by $5

If interest rate decreases A. Your investment on housing is not affected B. You will invest less on housing C. You invest more on housing D. You will sell your house

C. You invest more on housing

If price level goes up, A. consumption goes up along the same consumption function B. consumption function shifts up C. consumption function shifts down D. consumption goes down along the same consumption function

C. consumption function shifts down

Consumption function shows the relation between A. nominal GDP and consumption B. real GDP and consumption C. disposable income and consumption D. national income and consumption

C. disposable income and consumption

A stock market boom would lead to A. no change in consumption B. shift consumption function down C. shift consumption up D. increase consumption along the same consumption function

C. shifts consumption up

What is NOT included in National Income? A. profit B. rent C. transfer payments D. wage

C. transfer payments

If MPC goes down, A. value of multiplier remains constant B. value of multiplier goes up C. value of multiplier goes down D. price level goes up leading to inflation

C. value of multiplier goes down

If MPC= 0.8, a tax cut of $100 would lead to A. $80 decrease in consumption B. $0.8 increase in consumption C. $8 increase in consumption D. $80 increase in consumption

D. $80 increase in consumption

If U.S. prices are cheaper compared to Canada, A. there will be no equilibrium in U.S. goods market B. U.S. will export less to Canada C. Canada will import less from U.S. D. Canada will import more from U.S.

D. Canada will import more from U.S.

Which one is the example of consumer expenditure? A. Emily purchased a new home B. Emily purchased an old home C. Emily purchased a new computer for her business firm D. Emily purchased a new computer for her personal use

D. Emily purchased a new computer for her personal use

What is NOT a property of a macroeconomic equilibrium? A. Firms have no incentive to change prices B. Firms have no incentive to change production C. Firms have no incentive to change inventories D. Firms have no incentive to change their patents

D. Firms have no incentive to change their patents

Disposable income equals A. GDP +Taxes - Transfer Payments B. GDP +Taxes + Transfer Payments C. GDP -Taxes - Transfer Payments D. GDP -Taxes + Transfer Payments

D. GDP -Taxes + Transfer Payments

If total expenditure is higher than GDP, A. inventories are constant, but firms increase their production B. inventories are falling, firms decrease their production C. inventories are rising, firms increase their production D. inventories are falling, firms increase their production

D. inventories are falling, firms increase their production

The amount of unsold products of a firm is called A. unproductive investment B. assets C. liabilities D. inventory investment

D. inventory investment

If our economy becomes strong, A. Canadian economy will be weak B. Canada will increase their defence expenditure C. our export to Canada will go up D. our import from Canada will go up

D. our import from Canada will go up

Movement along the Aggregate Demand curve happens, if A. wealth changes B. import changes C. export changes D. price level changes

D. price level changes