Unit 1 to 3 Questions
1] M1 money is composed of…
A.
B.
C.
D.
currency, demand deposits, traveler's checks, and other checkable accounts
currency, demand deposits, savings deposits, money market mututal funds, and small time deposits.
currency, government bonds, gold certificates, and coins.
currency, NOW accounts, savings accounts, and government bonds.
2] Money overcomes the problem of a double coincidence of wants inherent in the barter system through its function as a
A.
B.
C.
D.
medium of exchange.
unit of account.
standard of deferred payment.
store of value.
3] The _____ demand for money arises out of the need to hold money as a medium of exchange. This demand for money is a
function of ___.
A.
B.
C.
D.
precautionary; interest rates
transactions; national income
speculative; interest rates
precautionary; national income
4] The speculative demand for money is:
A.
B.
C.
D.
positively related to interest rates
an active balance (earns interest)
inversely related to interest rates
directly related to income
5) If the income method of calculating GDP is not equal to the expenditure method, this is possibly because…
a)
b)
c)
d)
Some goods and services purchased, were purchased using income from illegal activities
Not all income earned was spent, some was placed in short and long term savings
All of the above
None of the above
6) For Gross Domestic Product to equal Gross National Product…
a)
b)
c)
d)
GDP + GNP = Net factor payments
GDP – Depreciation = GNP
GNP + NDP = GDP
None of the above
7) If Nominal GDP = Real GDP…
a)
b)
c)
d)
Inflation equals zero from the current base year
The base year is the current year
All of the above
None of the above
8) If we added up the value of all goods and services produced in an economy during a specific time period, we would…
a)
b)
c)
d)
Have a measure of the GDP of that economy
Underestimate the value of GDP in that economy
Overestimate the value of GDP in that economy
None of the above
9) The macroeconomic objectives of the South African economy include the following except…
a)
b)
c)
d)
Full employment
Economic growth
Inflation
Redistribution of wealth
10) If we added up the value of all goods and services produced in an economy during a specific time period, we would…
a) Have a measure of the GDP of that economy
b)
c)
d)
Underestimate the value of GDP in that economy
Overestimate the value of GDP in that economy
None of the above
11) If the income method of calculating GDP is not equal to the expenditure method, this is possibly because…
a)
b)
c)
d)
Some goods and services purchased, were purchased using income from illegal activities
Not all income earned was spent, some was placed in short and long term savings
All of the above
None of the above
TRUE / FALSE
12) If exports are greater than imports, without intervention the end result will be a decrease in domestic output and unemployment.
TRUE
13) The government makes available public goods and services to households and firms in the goods market. FALSE