Principles of Macroeconomics (ECON2202)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 200
Year: 2016
Continuous assessment
Instruction: answer all questions, any cancellation is considered wrong answer
Duration:2 hours
1) which of the following statements is correct?
a. Real GDP is the total market value of final goods and services produced in a
country for sale in a year valued at based year price.
b. Real GDP is the total value of final goods and services produced in a country for
sale.
c. Real GDP is the total market value of the final goods produced in a country for
sale in a year valued at base year prices.
d. Real GDP is the total market value of services produced in a country for sale.
2) Consider the following three consumer goods: 100 of good x, 100 of good y, and 100
of good z. in the base year, each of the three goods sold at 1FCFA. In the current
year, good x sold at 3FCFA, good y sold at 5FCFA, and good z sold at 10FCFA.
Based on this information, the consumer price index (CPI) for the current year is:
A. 100
B. 300
C. 500
D. 600
E. 1000
3) Which of the following functions correspond to near-money?
A. Being a medium of exchange but not a store of value
B. Being a store of value but not sufficiently liquid to serve as a medium of exchange.
C. Being a store of value and a medium of exchange.
D. Being a medium of exchange and a unit of account
4) Which of the following functions correspond to money-substitute?
A. Being a store of value and a medium of exchange
B. Being a store a store but not sufficiently liquid to serve as a medium of exchange
C. Being a medium of exchange but not a store of value
D. Being a medium of exchange and a unit of account
5) Fiat money is defined as:
A. Money without intrinsic value but established as money by government order
B. Money with intrinsic value even without being used as money
C. Money represented by document for a specified value of items
D. None of the above
6) In a sector economy-model where Y=C +I with C= a + bY; a = 200; b = 0.8; and I = 1000,
the equilibrium national income is:
A. 5000
B. 6000
C. 6500
D. 1500
7) In a circular flow of income, the main decision making agents are referred to as:
A. The primary sector, secondary sector, and tertiary sector
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
2nd Semester CA Course : Principles of Macroeconomics
Course Code: ECON202
www.schoolfaqs.net
B. The consumption, investment, and government spending
C. The households, firms, and the government
D. The public sector, private sector, and capitalist sector.
8) 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 services and illegal activities
D. Measuring the economic health of the economy
9) In the following consumption function: C = a
0
+ bY, the second term bY of the equation
represents:
A. Consumption income
B. Autonomous consumption
C. Induced consumption
D. Marginal propensity to consume
10) In the Keynesian analysis of consumption, more prominence is given to:
A. Average propensity to consume
B. Autonomous consumption
C. Induced consumption
D. Marginal propensity to consume
11) Someone with an average wealth or income is expected to have:
A. Very low marginal propensity to consume(MPC)
B. Average marginal propensity to consume(MPC)
C. Increasing marginal propensity to consume(MPC)
D. Very high marginal propensity to consume(MPC)
12) The statement: “the level of saving actually achieved by anyone represents the outcome of
the conflict between his desires to obtain future welfare by saving.” Is from:
A. John M. Keynes
B. Milton Friedman
C. Duesenberry
D. Tobin and Smithies
13) The nature of the relationship between the multiplier and marginal propensity to consume
is:
A. Objectively proportional
B. Inversely proportional
C. Subjectively proportional
D. Directly proportional
14) The rate of profit expected from an extra unit of a capital asset is known as:
A. Investment multiplier
B. Marginal efficiency of capital
C. Marginal return to investment
D. Discounted prospective yield
15) When the value of the multiplier is high, the value of the marginal propensity to
save(MPS):
A. Decreases
B. Increases
C. Remain constant
D. Is zero
www.schoolfaqs.net
