Economics 102 – B1
Introduction to Macroeconomics
First Term Examination
Special Code: 24
July 15, 2010
Section I: Multiple Choice. Do all 50 questions for 50 marks on the NCS sheet provided in pencil. Each question is worth 1 mark. For each questions, choose the BEST possible answer.
The goal of macroeconomics is
a. to explain how economic changes affect prices of particular goods.
b. to devise policies to deal with market failures such as externalities and monopoly.
c. to explain changes that affect households and firms in general.
d. None of the above are correct.
Firms use the money they get from a sale for
a. paying wages.
b. making a profit.
c. paying rents.
d. All of the above are correct.
Suppose that an apartment complex converts to a condominium where the renters are now owners of their former apartments.
a. The rent was included in GDP; the purchases of the condominiums are not.
b. The rent was included in GDP, and so is the purchase of the condominiums.
c. The rent was not included in GDP; the purchases of the condominiums are.
d. Neither the rent of the apartments nor the purchases of the condominium are included in
If a province made an illegal activity such as gambling or prostitution legal, then other things the same GDP
a. necessarily increases.
b. necessarily decreases.
c. doesn't change because both legal and illegal production are included in GDP.
d. doesn't change because these activities are never included in GDP.
a. always considered an intermediate good.
b. counted as a final good if a company uses it to provide transportation services.
c. counted as a final good if a consumer uses it to run a lawnmower to mow her yard.
d. Both b and c are correct.
e. Both a and c are correct.
The government reports that "GDP increased by 1.6 percent in the last quarter." This statement means that