Use the table below to answer the following question.
Item Millions of dollars
Wages paid to labour 800,000
Consumption expenditure 650,000
Taxes paid on wages 200,000
Government payments to support unemployed, sick, & aged 50,000
Firms' profits 200,000
Taxes paid on profits 50,000
Government expenditure on goods and service 200,000
1) Refer to Table 1. Consider the economy represented in the table. GDP in this economy, in millions
of dollars, is
E) none of the above.
2) The sum of wages, salaries and supplementary labour income, and other factor incomes is
A) net domestic income at factor cost.
B) net domestic product.
C) total output of the economy.
D) gross domestic product.
E) gross domestic income.
1 3) In any year, real GDP
A) increases if potential GDP increases, and decreases if potential GDP decreases.
B) must always be less than potential GDP.
C) will always be greater than potential GDP because of the tendency of nations to incur
D) always equals potential GDP.
E) might be greater than, less than, or equal to potential GDP.
4) In a country with a working-age population of 20 million, 13 million are employed, 1.5 million are
unemployed, and 1 million of the employed are working part-time, half of whom wish to work
full-time. The size of the labour force is
A) 15.5 million.
B) 20 million.
C) 14.5 million.
D) 13 million.
E) 11.5 million.
5) Which of the following pieces of information do you need to calculate the labour force
I. the number of employed persons
II. the number of unemployed persons
III. the population
IV.the working age population
A) I and III
B) I, II and III
C) I, II and IV
D) I and II
E) all of the above
2 Use the table below to answer the following question.
Suppose a simple economy produces three goods only.
The price and output data for some selected years are shown below.
Price Price Quantity Quantity
(dollars) (dollars) (number) (number)
2002 2012 2002 2012
Pop 0.75 1.10 100 120
Crackers 1.25 2.10 300 280
Cucumbers 2.00 3.00 200 190
6) Refer to Table 2. The reference base period is 2012. The CPI in 2012 is
7) If real GDP per person is growing at 4 percent per year, it will double in
A) 4 years.
B) 25 years.
C) 17.5 years.
D) 56 years.
E) 8 years.
3 Use the figure below to answer the following question.
8) Refer to Figure 1. As a result of the rightward shift in the demand curve for labour fro0 to
LD 1 the equilibrium level of employment ________, potential GDP ________, and potential GDP
per hour of labour ________.
A) decreases; decreases; decreases
B) increases; increases; increases
C) increases; decreases; increases
D) decreases; increases; decreases
E) increases; increases; decreases
9) An assumption of the new growth theory is that
A) the growth rate of labour productivity depends on people's ability to innovate.
B) all technological advances are the result of chance.
C) people earn a subsistence real wage in the long run.
D) the marginal product of all types of capital increases as more capital is accumulated.
E) technological advances encourage international trade.
4 Refer to the figure below to answer the following question.