FREE Master of Economics: Introduction to Macroeconomics Questions and Answers

Question 1

Which of the following claims regarding economic expansion is untrue?

Accepted Answer

Economic growth solves the economic problem.

Answer

Economic growth can be helped with more education.

Answer

Economic growth can be helped by using tidal power.

Answer

Economic growth can be helped by having new technology.

Question 2

Assume that year 1 is used as the starting point. That year's nominal GDP is £500 billion. The nominal GDP has increased to £700 billion by year 2, yet the GDP deflator is only 125. What will the annual real GDP be?

Accepted Answer

£500 billion in year 1 and £560 billion in year 2.

Answer

£500 billion in year 1 and £700 billion in year 2.

Answer

£625 billion in year 1 and £560 billion in year 2.

Answer

£625 billion in year 1 and £700 billion in year 2.

Question 3

What conditions define a recession in an economy?

Accepted Answer

If real GDP falls for two consecutive quarters.

Answer

If real GDP falls for two consecutive years.

Answer

If real GDP falls in one quarter compared with the quarter before.

Answer

If real GDP falls in one year compared with the year before.

Question 4

Which of the following is considered to be a member of the labor force?

Accepted Answer

People who have lost their jobs because of the recession and cannot at present find another job.

Answer

People who have chosen to care for their families or homes rather than seek paid employment.

Answer

People aged 60 who have retired early.

Answer

Full-time students who do not have paid employment.

Question 5

The four types of people listed below are not taken into account when calculating unemployment rates based on those who receive Job-Seekers' Allowance. Which of these four categories is also not taken into account in the global measurement?

Accepted Answer

People who work part-time but want to work full-time.

Answer

Unemployed people aged 16-17 who have left school.

Answer

Unemployed people who have not worked long enough to be entitled to Job-Seekers' Allowance.

Answer

Unemployed people aged 60 or more.

Question 6

Which of the subsequent claims is untrue?

Accepted Answer

Even in the worst recorded cases of hyperinflation, the price level always took at last a week to double.

Answer

Some people lose out if actual inflation turns out to be below the rate they expected.

Answer

Some people lose out if actual inflation turns out to be above the rate they expected.

Answer

Some people lose out if actual inflation turns out to be equal the rate they expected.

Question 7

Which of the following scenarios would see a rise in real GDP while maintaining the same level of prices?

Accepted Answer

The aggregate demand and aggregate supply curves both shifted right by the same amount.

Answer

The aggregate demand curve stayed put but aggregate supply shifted right.

Answer

The aggregate demand curve shifted right but the aggregate supply curve stayed put.

Answer

The aggregate demand and aggregate supply curves both shifted up by the same amount.