BAGACAY NATIONAL HIGH SCHOOL b. Both statements are false d. Only the first statement is false.

Senior High School Department _____ 11. The total output of goods and services of the economy over a given period of time is called the Gross
MIDTERM EXAMINATION in National Product. This output is measured in money values.
APPLIED ECONOMICS a. Both statements are true c. Only the first statement is true.
b. Both statements are false d. Only the first statement is false.
Name: __________________________________________Section: _____________ Date: _______________ _____ 12. National Income is an aggregate based on the incomes earned in the production of those goods and
services. National Income is equal to Net National Product minus indirect business taxes.
I. Choose the best answer from the given options. Write the capital letter of your answer on the space a. Both statements are true c. Only the first statement is true.
provided. No erasure! b. Both statements are false d. Only the first statement is false.
_____ 1. Economics is the study of how individuals fulfil their wants and needs. It also Involves making decision _____ 13. The total amount of money which the households could dispose of as they wish is called personal
in using limited resources. income. Personal Income is equal to Disposable Personal Income minus personal taxes.
a. Both statements are true c. Only the first statement is true. a. Both statements are true c. Only the first statement is true.
b. Both statements are false d. Only the first statement is false. b. Both statements are false d. Only the first statement is false.
_____ 2. In economics, Money is defined as anything that is generally accepted in exchange for goods and _____ 14. The Gross National Product is a measure of the total spending of all economic units for goods and
services. Some of the most important problems that confront a private enterprise economy arise from the use of services over the given period of time. The total spending in an economy is the sum of the spending by four
money. different source groups.
a. Both statements are true c. Only the first statement is true. a. Both statements are true c. Only the first statement is true.
b. Both statements are false d. Only the first statement is false. b. Both statements are false d. Only the first statement is false.
_____ 3. The household is the basic consuming unit in economic life. It is usually centered around the _____ 15. Consumption spending by households is the largest single element in the spending total. Investment
government unit. spending by government, while usually much smaller in total.
a. Both statements are true c. Only the first statement is true. a. Both statements are true c. Only the first statement is true.
b. Both statements are false d. Only the first statement is false. b. Both statements are false d. Only the first statement is false.
_____ 4. The heart of the circular flow is the movement of resource services from the households to the firms, _____ 16. The major part of the National Income of a country is usually spent directly on government
and the reverse movement of goods and services from the firms to the households. It is known as the primary expenditure. That part of the National Income which is not so used, which is not spent, is described by the
circuit. economist as savings.
a. Both statements are true c. Only the first statement is true. a. Both statements are true c. Only the first statement is true.
b. Both statements are false d. Only the first statement is false. b. Both statements are false d. Only the first statement is false.
_____ 5. The circular flow of goods and services from household to the firm and vice-versa is known as the _____ 17. Needs are things that we cannot live without. Examples of needs are cars, jewellery, cellphones etc.
wheel of fortune. It is common to all modern economies. a. Both statements are true c. Only the first statement is true.
a. Both statements are true c. Only the first statement is true. b. Both statements are false d. Only the first statement is false.
b. Both statements are false d. Only the first statement is false. _____ 18. Macroeconomics deals with how individuals make decisions. In the hand, microeconomics deals with
_____ 6. National income accounts may be used in rough comparisons of the economic well-being of a group of the big picture, such as, employment, taxes and others.
people in a country at one period of time to their well-being at other periods of time. Moreover, it is also used in _____ 19. Opportunity costs are decisions that involve picking one thing over all the other possibilities. For
of the economic welfare of the people in one country to the welfare of the peoples in other countries. example, if you choose strawberries than the apple, the apple is your opportunity cost.
a. Both statements are true c. Only the first statement is true. a. Both statements are true c. Only the first statement is true.
b. Both statements are false d. Only the first statement is false. b. Both statements are false d. Only the first statement is false.
_____ 7. Psychic income measures the flow of satisfactions received by _____ 20. Production is how much stuff an individual, business, country, even the world makes.
that person over a given period of time. However, psychic income is difficult to measure. Goods are works that is performed for others.
_____ 8. One that deals with the flow of goods and services received by an individual over a given period of a. Both statements are true c. Only the first statement is true.
time is known as real income. It cannot be measured directly because of the diverse character of the items that b. Both statements are false d. Only the first statement is false.
enter into the flow. _____ 21. There are 4 common types of economic systems. One of those is the laissez faire, wherein the
a. Both statements are true c. Only the first statement is true. government plays no role in allocating resources.
b. Both statements are false d. Only the first statement is false. a. Both statements are true c. Only the first statement is true.
_____ 9. The unit of measurement in national income accounting is the standard money unit of the world. b. Both statements are false d. Only the first statement is false.
Money unit is the only standard unit in which each of the items can be expressed. _____ 22. In the production process, factors of production come first. It refers to those we need to make goods
a. Both statements are true c. Only the first statement is true. and services.
b. Both statements are false d. Only the first statement is false. a. Both statements are true c. Only the first statement is true.
_____ 10. The time period used in National Income Accounting is usually one year. However, sometimes, b. Both statements are false d. Only the first statement is false.
national income is measured every two years depending on economic variables. _____ 23. If we increase land, labor, capital we increase production. If we decrease land, labor, capital we still
a. Both statements are true c. Only the first statement is true. increase production.
 a. Both statements are true c. Only the first statement is true.
b. Both statements are false d. Only the first statement is false.
_____ 24. Scarcity happened when the resources are limited. Shortage happened when there is temporary
shortcomings of supply due calamities.
a. Both statements are true c. Only the first statement is true.
b. Both statements are false d. Only the first statement is false.
_____ 25. Production Possibility Curve shows alternatives to what an economy can produce. Any point along
the line of the curve shows the economy operating at maximum efficiency.
a. Both statements are true c. Only the first statement is true.
b. Both statements are false d. Only the first statement is false.
II. Identify if the following sentence is TRUE or FALSE. Write FALSE if it is true; TRUE if it is not. NO
ERASURE.
__________ 26. Government spending is the largest single element in total spending.
__________ 27. The part of national income that is not spent in consumer goods becomes savings.
__________ 28. Savings is equal to investment.
__________ 29. Money income is more valid measure of national income than real income.
__________ 30. Foreign spending is part of national spending.
___________ 31 . The unit of measurement in national income accounting is the standard international money
unit, which is dollars.
__________ 32. One of the uses of the National Income is provide a comparison of the economic welfare of the
people in the country.
__________ 33. Psychic income deals with the flow of goods and services received by an individual over a
given a period of time.
__________ 34. The total output of goods and services of the economy over a given period of time is called
National Income
__________ 35. Personal income is equal to National Income minus retained profits and taxes on profits and
plus transfer payments.
__________ 36.The movement of resource services from the household to the firms, and the reverse movement
of goods and services from the firms to the household is illustrated in the money circuit.
__________ 37. Real income deals with the satisfaction received by a person over a given period of time.
__________ 38. The time period used in National Income Accounting is usually one year.
__________ 39. The household is the basic consuming unit in economic life.
__________ 40. When the interaction between household and firms employs money, it is known as the primary
circuit.
__________ 41. Producers are company that makes goods and/or delivers services.
__________ 42. Division of labor refers to dividing up production so that Goods are produced efficiently.
__________ 43. A measure of the production of an entire country in one year domestically is known as Gross
National Product.
__________ 44. Any point below the PPF line is impossible.
__________ 45. Law of Increasing Costs means as production increases for one item, few resources are
necessary to increase production of the second item.
__________ 46. A production possibilities curve shows the relationship between the production of 2 or more
categories of goods.
__________ 48. Capital goods are final products that are purchased directly by the consumer.
__________ 49. When the government and the private sector jointly solve economic problems it is considered
as a Laissez Faire economy.
__________ 50. In economics, land means all natural resources except those resources found in the ocean.

Bonus +5 NO ERASURE!
If life gets tough, what do you have that you can always count on? _________