Question 1

Economic growth is measured by:

Accepted Answer

A)  the percentage change in the price level over a period of time 
B)  the percentage increase in nominal GDP over a period of time 
C)  the percentage increase in real GDP over a period of time 
D)  the level of output in a given year 
A)  the percentage change in the price level over a period of time 
B)  the percentage increase in nominal GDP over a period of time 
C)  the percentage increase in real GDP over a period of time 
D)  the level of output in a given year C

Question 2

If a country's actual growth rate has increased this must also mean that the country's potential growth rate has also risen.

Accepted Answer

A) True 
 B)False  False

Question 3

In the circular flow of income diagram what are injections and withdrawals? Give examples.

Accepted Answer

Injections are expenditure on the production of domestic firms coming from outside the inner flow of the circular flow of income. Examples include investment, government expenditure and exports. Similarly, withdrawals are incomes of households or firms that are not passed on around the inner flow. Examples include net saving, net taxes and imports.

Question 4

The number of people classified as employed is 250 000 and the number of people classified as unemployed is 50 000. The size of the labour force:

Accepted Answer

A)  equals 250 000 
B)  equals 200 000 
C)  equals 50 000 
D)  equals 300 000 
A)  equals 250 000 
B)  equals 200 000 
C)  equals 50 000 
D)  equals 300 000

Question 5

Which of the following is not regarded as an injection into the circular flow of income?

Accepted Answer

A)  saving 
B)  investment 
C)  export expenditure 
D)  government expenditure 
A)  saving 
B)  investment 
C)  export expenditure 
D)  government expenditure

Question 6

The record of a country's transactions in goods, services and assets with the rest of the world is its:

Accepted Answer

A)  capital account 
B)  current account 
C)  balance of trade 
D)  balance of payments 
A)  capital account 
B)  current account 
C)  balance of trade 
D)  balance of payments

Question 7

The statements below refer to the circular flow of income at the current point in time. Correctly match the following pairs.
(a) Firms pay households for the supply of their inputs.
(b) There is a legal requirement that workers put more money in the superannuation funds.
(c) Company taxes increase.

(i)	neither a net injection nor a net withdrawal
(ii)	a net injection
(iii)	a net withdrawal

Accepted Answer

(a) i 
(b)

Question 8

Which of the following is likely to benefit from a high rate of inflation?

Accepted Answer

A)  a person with $20,000 on deposit at a building society 
B)  a couple who have borrowed money at a fixed rate of interest to buy their home 
C)  a person who has retired on a fixed pension 
D)  a person who has bought a fixed interest bond 
A)  a person with $20,000 on deposit at a building society 
B)  a couple who have borrowed money at a fixed rate of interest to buy their home 
C)  a person who has retired on a fixed pension 
D)  a person who has bought a fixed interest bond

Question 9

The annual average rate of economic growth for Australia between 2000 and 2007 was:

Accepted Answer

A)  1.6 
B)  0.7 
C)  1.7 
D)  2.8 
A)  1.6 
B)  0.7 
C)  1.7 
D)  2.8

Question 10

Explain the circular flow of income model, and discuss the relationship between injections and withdrawals.

Accepted Answer

The 'inner flow' contains the flow of fa

Question 11

There are no costs associated with inflation if the inflation rate is perfectly anticipated.

Accepted Answer

A) True 
 B)False

Question 12

Which of the following is NOT a cost of inflation?

Accepted Answer

A)  exports may become more competitive 
B)  firms have to adjust prices 
C)  difficulties arise for firms when trying to predict revenues 
D)  income is redistributed to those on fixed incomes 
A)  exports may become more competitive 
B)  firms have to adjust prices 
C)  difficulties arise for firms when trying to predict revenues 
D)  income is redistributed to those on fixed incomes

Question 13

Explain the costs associated with anticipated inflation.

Accepted Answer

If inflation is fully anticipated, and t

Question 14

The rate of inflation is measured by the percentage change in the price level from year to year.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following is NOT one of the four major concerns of macroeconomics?

Accepted Answer

A)  the balance of payments 
B)  the circular flow of income 
C)  the percentage increase in prices 
D)  the rate of economic growth 
A)  the balance of payments 
B)  the circular flow of income 
C)  the percentage increase in prices 
D)  the rate of economic growth

Question 16

The annual average rate of inflation for Australia between 2000 and 2007 was:

Accepted Answer

A)  7.2 
B)  2.4 
C)  9.8 
D)  1.1 
A)  7.2 
B)  2.4 
C)  9.8 
D)  1.1

Question 17

When injections exceed withdrawals, total output will:

Accepted Answer

A)  fall 
B)  not change 
C)  rise 
D)  accelerate 
A)  fall 
B)  not change 
C)  rise 
D)  accelerate

Question 18

When withdrawals exceed injections, total output will:

Accepted Answer

A)  not change 
B)  fall 
C)  rise 
D)  accelerate 
A)  not change 
B)  fall 
C)  rise 
D)  accelerate

Question 19

The economic growth rate is the increase in real output in dollar terms per year.

Accepted Answer

A) True 
 B)False

Question 20

Potential economic growth is:

Accepted Answer

A)  the percentage annual increase in the economy's available resources 
B)  the percentage annual increase in nominal GDP 
C)  the percentage annual increase in the economy's potential to produce 
D)  the percentage annual increase in real GDP 
A)  the percentage annual increase in the economy's available resources 
B)  the percentage annual increase in nominal GDP 
C)  the percentage annual increase in the economy's potential to produce 
D)  the percentage annual increase in real GDP

Economic growth is measured by:

If a country's actual growth rate has increased this must also mean that the country's potential growth rate has also risen.

In the circular flow of income diagram what are injections and withdrawals? Give examples.

The number of people classified as employed is 250 000 and the number of people classified as unemployed is 50 000. The size of the labour force:

Which of the following is not regarded as an injection into the circular flow of income?

The record of a country's transactions in goods, services and assets with the rest of the world is its:

Which of the following is likely to benefit from a high rate of inflation?

The annual average rate of economic growth for Australia between 2000 and 2007 was:

Explain the circular flow of income model, and discuss the relationship between injections and withdrawals.

There are no costs associated with inflation if the inflation rate is perfectly anticipated.

Which of the following is NOT a cost of inflation?

Explain the costs associated with anticipated inflation.

The rate of inflation is measured by the percentage change in the price level from year to year.

Which of the following is NOT one of the four major concerns of macroeconomics?

The annual average rate of inflation for Australia between 2000 and 2007 was:

When injections exceed withdrawals, total output will:

When withdrawals exceed injections, total output will:

The economic growth rate is the increase in real output in dollar terms per year.

Potential economic growth is:

Economic Issues

Markets, Demand and Supply

Markets in Action

Background to Supply

Perfect Competition and Monopoly

Imperfect Competition

Market Failures and Government Policy

Wages and Employment

The Determination of Gross Domestic Product

Banking, Money and Interest Rates

Inflation

Macroeconomic Policy

Globalisation and International Trade

Balance of Payments and Exchange Rates

Filters

Exam 9: Introduction to Macroeconomics

Economic growth is measured by:

If a country's actual growth rate has increased this must also mean that the country's potential growth rate has also risen.

In the circular flow of income diagram what are injections and withdrawals? Give examples.

The number of people classified as employed is 250 000 and the number of people classified as unemployed is 50 000. The size of the labour force:

Which of the following is not regarded as an injection into the circular flow of income?

The record of a country's transactions in goods, services and assets with the rest of the world is its:

Which of the following is likely to benefit from a high rate of inflation?

The annual average rate of economic growth for Australia between 2000 and 2007 was:

Explain the circular flow of income model, and discuss the relationship between injections and withdrawals.

There are no costs associated with inflation if the inflation rate is perfectly anticipated.

Which of the following is NOT a cost of inflation?

Explain the costs associated with anticipated inflation.

The rate of inflation is measured by the percentage change in the price level from year to year.

Which of the following is NOT one of the four major concerns of macroeconomics?

The annual average rate of inflation for Australia between 2000 and 2007 was:

When injections exceed withdrawals, total output will:

When withdrawals exceed injections, total output will:

The economic growth rate is the increase in real output in dollar terms per year.

Potential economic growth is:

Economic Issues

Markets, Demand and Supply

Markets in Action

Background to Supply

Perfect Competition and Monopoly

Imperfect Competition

Market Failures and Government Policy

Wages and Employment

The Determination of Gross Domestic Product

Banking, Money and Interest Rates

Inflation

Macroeconomic Policy

Globalisation and International Trade

Balance of Payments and Exchange Rates

Filters