Download Aplia Test #1 Which of the following best describes the key

Aplia Test #1
Which of the following best describes the key objectives of macroeconomics?
Maximising the growth rate of real GDP, minimising unemployment and inflation.
GDP is best described as which of the following
the value of goods and services produced domestically in an economy
Which of the following best describes the difference between GDP and GNP
Net factor income from abroad
Potential GDP is best described by which of the following
The value of output that could be produced in the economy if all factors of production were being used at
their most efficient level
If an economy is in a boom, the appropriate fiscal policy that should be pursued by governement is
Countercylical fiscal policy such as increasing taxes and lowering government expenditure
Cyclical unemployment is best defined as
Unemployment as a result of a downturn in the business cycle
Which of the following is a reason why the Consumer Price Index (CPI) is not calculated as a simple
average of all prices?
Goods differ in their importance in the average consumer's budget.
If the price of the market basket of goods in the base year of 2009 was €20,000 and the price of the same
basket had risen to €22,000 by 2010, the CPI for 2010
Is 110.
Factors that cause the CPI to exaggerate the inflation rate do NOT include
Political pressure from unions and retirees on the providers of a country's official statistics to overstate the
inflation rate.
If the consumer price index has a value of 115 today and the base year is 2005, then consumer prices
have
Increased by 15 per cent since 2005.
Suppose a person marries his or her gardener and therefore no longer pays him or her for gardening
services. GDP
Decreases since there is no longer a market exchange.
In the circular flow model, firms use the money they earn from selling their goods and services to pay for
the
resources they buy in the factor market.
In the circular flow model, the source of the factors of production used to create goods and services is
Firms.
In general, a higher than anticipated inflation rate
Helps debtors and harms creditors.
Which of the following would be most likely to cause GDP to overstate the actual output produced in a
year?
a decline in the quality of goods and services produced
Use this table to find the real wage in 2010.
Year
Nominal Wage (€/Hour)
CPI
2009
€12.50
155.0
2010
€13.00
160.0
€8.13
Real GDP is nominal GDP
Adjusted for changes in the price level.
Which of the following would be counted as an investment expenditure in the national income accounts?
JCB expands plant capacity to produce more earth moving equipment.