LYCEUM-NORTHWESTERN UNIVERSITY

Tapuac District, Dagupan City

COLLEGE OF BUSINESS EDUCATION

QUIZ # 2
BA11 INTRO TO MACROECONOMICS: THEORY & PRACTICE
1st Semester, AY 2017 – 2018

Name: _____________________________________ Score:____________________

Year/Section:________________________________ Date:_____________________

I - MULTIPLE CHOICE. Choose the best answer from the choices and place your answer in the space
provided before the number. Write in CAPITAL LETTERS and strictly “NO ERASURES”.

________1. Which of the following statement is correct?

a. Real GDP is the total market value of the final goods services produced in America for
sale in a year valued in the prices of 1992
b. Your buying stock in the stock market example of investment spending
c. Potential Real GDP is always greater than Equilibrium Real GDP
d. Social security and welfare are examples of spending on infrastructure.

________2. A market is considered imperfectly competitive whenever

a. The government intervenes to set a price floor
b. The government intervenes to set a price ceiling
c. Supply and demand explain how prices are determined
d. A single buyer or seller has the power to affect the price of the product
e. Supply and demand fail to establish an equilibrium

________3. In a market system, prices are determined by

a. Corporate executives
b. Government bureaucrats
c. Supply and demand
d. Total market demand
e. Production cost

________4. Which of the following is an example of a final good or service?

a. Paint purchased by Ford, Inc. used to paint their new fleet of Mustangs.
b. Beef bought by a restaurant owner from a wholesale food distributor.
c. A brand new economics text book purchased by an UW student.
d. Jet Fuel bought by Northwest Airlines to power its fleet of planes.

________5. GDP does not include

a. Vegetables grown and consumed by a nonfarm family
b. The purchase of a new Porsche
 c. The sale of meat at the local grocery store
d. The government purchase of a F-14 fighter plane
e. The salary paid to a company CEO.

________6. Intermediate goods and services

a. Are not included in calculating GDP using the value-added method
b. Are goods and services produced in the last year but sold in this year
c. Are goods and services used as an input for the production of final goods and services
d. Are goods and services purchased for ultimate consumption
e. Are goods and services produced this year but not yet sold

________7. Real GDP measures

a. Personal income adjusted for taxes paid to the government
b. National output adjusted for changes in the quality of products
c. National output adjusted for price level changes
d. Nominal output adjusted for changes in national income because of economic booms
e. National output adjusted for unemployment

________8. Looking at the 2001 Philippines GDP statistics, the fact that net exports were negative
means that
a. Imports were greater than exports in the 1990s
b. Exports were greater than imports up to 2001
c. Imports were greater than exports in 2001
d. Exports were greater than imports in 2001
e. Exports were greater than imports in the 1990s

II – IDENTIFICATION. Identify what is being described in each statement. Write your answers on space
provided. Strictly no erasure, altering or any form of tampering.

_________________ 1. The summation of all final goods and services produced within a country for
a specific period of time.
_________________ 2. It is a period of relative normality in an economy.

_________________ 3. Refers to goods that one buys for future use like machinery and equipment
which are also utilized to produce other goods and services.

_________________ 4. It is the measure of all the final goods produced by the labor of a country in
a specific time period, including earnings from abroad.

_________________ 5. It is the sum of remittances coming from abroad. It is the difference

between GNP and GDP.

_________________ 6. It is the value of economic outputs for a year adjusted to remove price
changes.

_________________ 7. Refers to the difference between imports and exports.