Principles of Macroeconomics (ECON202)
Faculty of Economics and Management Science (FEMS)
Semester: Resit
Level: 200
Year: 2019
1) Which of the following is not a limitation of national income concept?
a) Counting together of finished and raw output of a production process. b) Existence
of subsistence economy. c) Assessment of unpaid service and illegal activities. d)
Measuring the economic health of the economy.
2) Which of the following would cause consumption to rise?
a) A rise in the GDP deflator rises. b) A greater proportion of the population aged
between 20 and 30 years old. c) A rise in transitory period. d) A transfer of income
from poor people to rich people.
3) In business cycle, the period between the peak and the trough but above the potential
GDP is: a) recovery. b) Depression. c) Recession. d) Recovery.
4) In a business cycle, the period between the trough and the peak but below the
potential GDP is:
a) Recovery. b) Depression. c) Recession. d) Expansion
5) The period of the business cycle which follows the trough is:
a) Recession. b) Expansion. c) Recovery. d) all of the above
6) When a business cycle is approaching the peak, actual real GDP ……. potential real
GDP.
a) Exceeds. b) Equals. c) is less than
7) Macroeconomics is the branch of economics that deals with:
a) imperfectly competitive markets. b) Only the long run adjustments to equilibrium
in the recovery. c) The function of individual industries and the behavior of
individual decision-making units. d) the economy as s whole
8) In the circular flow of income, Keynesian equilibrium is achieved when:
a) all the individual sectors are in equilibrium: S=I, T=G, M=X
b) the aggregate injections equal aggregate withdrawals: S+T+M=I+G+X.
c) there is no inflation or unemployment. d) The interest rate and exchange rate are at
their market clearing levels.
9) The principal actors in the circular flow of income are:
a) The government, firms, banking sector. b) The government, agriculture, savings.
c) The government, households, firms. d) Agriculture, government, municipalities.
10) Emulatory consumption refers to what aspect of income?
a) Expected income. b) Life time income. c) Relative income. d) Permanent
income.
11) What happens to income, as AOC tends to decline?
a) Increase. b) Remained the same. c) Declined. d) No effect
12) Suppose the capital asset of a firm on 31/03/2017 are 100F and it invests at the rate of
10F during the year 2016-2018. What is the capital at the end of the next year
(31/03/2018)
a) 105 F b) 115F c) 120F 110F
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
Resit Course: Principles of Macroeconomics: ECON202
Credit Value:
Course Lecturers:
Time: Course Status: Date:
Venue: Instruction:
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13) What aspect of investment relates capital and investment?
a) Gross capital b) Net investment c) Gross investment d) Net
Profit
14) If the supply price of a capital asset is 20,000F and its annual yield is 2,000F, the
marginal efficiency of the asset is:
a)10% b) 5% c) 15% d) 8%
15) The MEC is based on what aspect of capital?
a) Asset b) Demand c) Supply price d) Investment
16) In the following consumption function:
the term of the equation
represents:
a) consumption income. b) Autonomous consumption.
c) Induced consumption. d) Marginal propensity to consume
17) If the economy is at the peak of the business cycle, aggregate demand is likely to
be…., unemployment is likely to be…., inflation is likely to be…., and the current
account of the balance of payment is likely to be moving towards……………?
a) Rising; falling; rising; deficit b) Static; low; rising; deficit.
c) Falling; falling; falling; surplus d) Falling; rising; falling; surplus
18) If the economy is approaching the trough of the business cycle, aggregate demand is
likely to be……, unemployment is likely to be….., inflation is likely to be…., and the
current account of the balance of payment is likely to be moving towards….,?
a) Rising; falling; rising; deficit b) Static; low; rising; deficit.
c) Falling; falling; falling; surplus d) Falling; rising; falling; surplus
19) As the MPS increases, the multiplier will:
a) increase. b) Either increase or decrease depending on the size of the change in
investment
c) Remain constant d) decrease.
20) Disposable income is obtained by subtracting……….. taxes from personal income:
a) Indirect taxes. b) Direct taxes c) Subsidies d) none
21) In an economy where the
equilibrium national income is:
a) 1’500. b) 5’000. c)6’000 d) 6’500
22) Consider the following 3 consumer goods: 100 of good1, 100 of good 2, and 100 of
good 3. In the base year, each of the 3 goods sold at 1F. In the current year, good 1
sold at 3F, good 2 sold at 5F, and good 3 sold at 10F. Based on this information, the
consumer price index (CPI) for the current year is:
a) 100. b) 300 c) 500 d) 600 e) 1’000
23) In Keynesian analysis of consumption, more prominence is given to:
a) Average propensity to consume. b) Autonomous consumption
c) Marginal propensity to consume. d) induced consumption
24) In the following consumption function:
the term of the equation
represent:
a) Consumption income. b) Autonomous consumption
c) Induced consumption d) Marginal propensity to consume
25) When autonomous consumption is
, the national income equilibrium determination
in a one sector economy requires that:
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a) Y=
+ I over(1-b). b) Y=
over (1-b). c) Y=
+I+G over (1-b). d)
Y=
+I+G+(X-M) over(1-b)
26) When autonomous consumption is
, national equilibrium determination in a 2
sector economy is:
a) Y=
+ I over(1-b). b) Y=
over (1-b). c) Y=
+I+G over (1-b). d)
Y=
+I+G+(X-M) over(1-b)
27) When autonomous consumption is
, national equilibrium determination in a 3
sector economy is:
a) Y=
+ I over(1-b). b) Y=
over (1-b). c) Y=
+I+G over (1-b). d)
Y=
+I+G+(X-M) over(1-b)
28) When autonomous consumption is
, national equilibrium determination in a 4
sector economy is:
a) Y=
+ I over(1-b). b) Y=
over (1-b). c) Y=
+I+G over (1-b). d)
Y=
+I+G+(X-M) over(1-b)
Use the following data about a hypothetical economy to answer question 28 to
question 30:
consumer price index in 2011=132, consumer price index in 2010=110, nominal GDP
in 2011=60billionF, nominal GDP in 2010= 50billionF, population in 2011=7million
people, population in 2010=6million people, net factor income from abroad in
2010=+3billionF, net factor income from abroad in 2010= -2billionF.
29) By how much has real GDP grown from 2010 to 2011?
a) -10% b) 12.5% c) 20% d) 0%
30) By how much has per capita nominal GNP changed from 2010 to 2011
a) -10% b) 12.5% c) 20% d) 0%
31) Based on the above information we can say that:
a) Poverty has fallen in the country b) Real Growth in the informal sector is
0%
c) Per capita real GDP is falling. D) Income inequality has worsened.
32) In the national income accounting identity stands for:
a) Taxes minus transfers. B) Taxes. C) Taxes plus transfers. D)
Transfers
33) A complete business cycle has………..fluctuating phases and …….turning points.
a) Four, two b) Two, two c) Two, four d) Four, zero
34) When income is 100,000F; a person spends 90,000F on consumer goods. When the
income rises to 200,000F, he spends 160,000F on consumer goods. Then his marginal
propensity to consume (MPC) is:
a) 0.9 b) 0.8 c) 1 d) 0.7 e)70,000F
35) The Purchasing Power Parity (PPP) theory of exchange rate implies that the real
exchange rate between 2 countries:
a) Should rise when the foreign price level increases relative to the domestic price
level.
b) Should be constant.
c) Should fall when the foreign price level decreases relative to the domestic price
level.
d) Both A and B.
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