Answer this MCQ

1.	If a nation's GDP rises, then it must be the case that the nation's
	A.	income and expenditure both rise.
	B.	income and saving both rises.
	C.	income rises, but expenditure may rise or fall.
	D.	saving rises, but income may rise or fall.

2.	An American company operates a fast food restaurant in Romania. Which of the following statements is accurate?
	A.	The value of the goods and services produced by the restaurant is included in both Romanian GDP and U.S. GDP.
	B.	One-half of the value of the goods and services produced by the restaurant is included in Romanian GDP, and the other one-half of the value is included in U.S. GDP.
	C.	The value of the goods and services produced by the restaurant is included in Romanian GDP, but not in the U.S. GDP.
	D.	The value of the goods and services produced by the restaurant is included in U.S. GDP, but not in Romanian GDP.

3.	A transfer paymentis a payment made by
	A.	consumers, but not in exchange for a tangible product.
	B.	firms, but not in exchange for capital equipment.
	C.	foreigners, but not in exchange for a domestically-produced good or service.
	D.	government, but not in exchange for a currently produced good or service.

4.	For a certain economy in 2005, GDP was $2,000; investment was $400; government purchases were $300; net exports were $70. It follows that consumption was
	A.	$1,370.
	B.	$1,330.
	C.	$1,230.
	D.	60 percent of GDP.

5.	For any given year, the CPI is the price of the basket of goods and services in the
	A.	given year divided by the price of the basket in the base year, then multiplied by 100.
	B.	given year divided by the price of the basket in the previous year, then multiplied by 100.
	C.	base year divided by the price of the basket in the given year, then multiplied by 100.
	D.	previous year divided by the price of the basket in the given year, then multiplied by 100.

6.	Consider two countries. Country A has a population of 1,000, of whom 800 work 8 hours a day to make 128,000 final goods. Country B has a population of 2,000 of whom 1,800 work 6 hours a day to make 270,000 final goods
	A.	Country A has higher productivity and higher real GDP per person than country B.
	B.	Country A has lower productivity and lower real GDP per person than country B.
	C.	Country A has higher productivity, but lower real GDP per person than country B.
	D.	Country B has lower productivity, but higher real GDP per person than country B.

7.	The inputs of production of goods and services that are provided by nature, such as land, rivers, and mineral deposits are called
	A.	physical capital.
	B.	natural resources.
	C.	human capital.
	D.	technological knowledge.

8.	The relationship between the quantity of output created and the quantity of inputs needed to create it is called
	A.	the capital accumulation function.
	B.	technological knowledge.
	C.	the production function.
	D.	human capital.

9.	Which of the following equations represents a national saving in a closed economy?
	A.	Y - I - G - NX
	B.	Y - C - G
	C.	Y - I - C
	D.	G + C - Y

10.	Consider T-G and Y-T-C.
	A.	Each one of these is equal to national saving.
	B.	Each one of these is equal to public saving.
	C.	The first of these is private saving, the second one is public saving.
	D.	The first of these is public saving, the second one is private saving.