QUESTIONS WEEK ONE
BASIC CONCEPTS
1.
2.
3.
Please define Gross Domestic Product (GDP
Please define inflation and calculate it data from your country.
What are the three main types of Unemployment? Frictional, Cyclical and Structural.
FISCAL POLICY
1.
2.
3.
What is the bas ic fiscal constrain?
Cite some of the main characteristics of a sound fiscal policy?
Please cite two examples of pro-poor expenditures.
QUIZES
1. Economics is different from other social sciences because it is primarily concerned with the study of
________, it is similar to other social sciences because they are all concerned with the study of ________.
A.
B.
C.
D.
limited resources, market behavior
scarcity, human behavior
social behavior, limited resources
economic activity, unlimited resources
2. Corruption is a ____________ tax.
a.
b.
c.
Regressive
Progressive
Neutral
3. When a state government reforms its welfare system by reducing the share of taxes transferred to the
poor, it is primarily undertaking __________ policy.
a.
b.
c.
d.
Fiscal
Monetary
Judicial
Regulatory
ANWERS WEEK ONE
BASIC CONCEPTS
1. Please define Gross Domestic Product (GDP): The total market value of all final goods and services
produced within a country in 1 year.
2. Please define inflation and calculate it with the data in the following table. Inflation occurs when average
level of prices rises, while average price level falls during deflation. Price hikes for a single good are not
necessarily inflationary for the whole economy. The consumer price index (CPI) is a statistical measure of
changes over time in prices of a basket of typical goods purchased by typical consumers. The CPI is used to
report the rate of inflation each month.
3. What are the three main types of Unemployment? Frictional, Cyclical and Structural.
FISCAL POLICY
1. What is the basic fiscal constrain? Basic fiscal constraint: any expenditure not financed from taxes must
be financed by printing money, debt or aid
2. What are the main characteristics of a sound fiscal policy? Economic efficiency, Simple administration;
Flexibility; Political responsibility and Fairness.
3. Please cite two examples of pro-poor expenditures: Primary education; Primary health care; Rural roads;
Basic services (water & sewerage); Low income housing.
QUIZES
1. Economics is different from other social sciences because it is primarily concerned with the study of
________, it is similar to other social sciences because they are all concerned with the study of ________.
a.
b.
c.
d.
limited resources, market behavior
scarcity, human behavior
social behavior, limited resources
economic activity, unlimited resources
CORRECT ANSWER: b
2. Corruption is a ____________ tax.
a.
b.
c.
Regressive
Progressive
Neutral
CORRECT ANSWER: A (it disproportionately affects the poor)
3. When a state government reforms its welfare system by reducing the share of taxes transferred to the
poor, it is primarily undertaking __________ policy.
a.
b.
c.
d.
Fiscal
Monetary
Judicial
Regulatory
CORRECT ANSWER: A