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Practie Questions For Mid Term Exam No Solution

The document consists of practice questions divided into three parts: multiple choice, true/false, and calculation questions related to economic principles, GDP, inflation, and unemployment. It includes 20 multiple choice questions, 10 true/false questions with explanations, and 10 calculation problems requiring various economic calculations. The content is designed to test knowledge and understanding of economic concepts and metrics.

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13 views6 pages

Practie Questions For Mid Term Exam No Solution

The document consists of practice questions divided into three parts: multiple choice, true/false, and calculation questions related to economic principles, GDP, inflation, and unemployment. It includes 20 multiple choice questions, 10 true/false questions with explanations, and 10 calculation problems requiring various economic calculations. The content is designed to test knowledge and understanding of economic concepts and metrics.

Uploaded by

tamnhunguyen1406
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Practice questions.

Part 1. Multiple choice

1. Which of the following is an example of the principle "People face trade-offs"?


A. A student decides to study instead of going to a party.
B. The government prints more money.
C. The price of a good increases due to high demand.
D. A company increases production.

2. What does the principle "Rational people think at the margin" imply?
A. People always think irrationally under pressure.
B. Decisions are made based on total costs.
C. People make decisions by comparing marginal benefits and marginal costs.
D. Resources are allocated evenly.

3. Which principle explains the benefit of globalization?


A. Prices rise with money printing.
B. Trade can make everyone better off.
C. Governments always improve outcomes.
D. Society faces no trade-offs.

4. What happens when the government prints too much money?


A. Unemployment decreases.
B. Prices fall.
C. Inflation occurs.
D. Productivity increases.

5. GDP measures:
A. Only goods produced by the government.
B. The total market value of all final goods and services produced within a country.
C. The income of only the working population.
D. All financial transactions.

6. Real GDP:
A. Uses current prices.
B. Includes imports.
C. Is adjusted for inflation. ( remove the impacts of price)
D. Ignores production changes.

7. Nominal GDP will increase if:


A. Prices rise or quantity increases.
B. Inflation decreases.
C. The population decreases.
D. Exports fall.

8. Which of the following would be included in GDP?


A. Buying stock in a company.
B. A new car purchased from a dealership.
C. A used book sale.
D. A gift from a friend.

9. The GDP deflator is used to:


A. Measure cost of living.
B. Calculate inflation using imports.
C. Convert nominal GDP to real GDP.
D. Determine personal income.

10. The CPI measures:


A. The average productivity of firms.
B. The price level of all produced goods.
C. The cost of a fixed basket of goods and services.
D. Only food and fuel prices.

11. A major problem with CPI is:


A. It adjusts for inflation automatically.
B. It understates the cost of living.
C. Substitution bias. ( don’t move bc u caculate ủ fixed basket)
D. It excludes consumer behavior.

12. If the CPI increases, it implies:


A. A decrease in national income.
B. Prices have fallen.
C. The cost of living has increased.
D. Real wages have increased.

13. Investment in GDP includes:


A. Buying stocks.
B. Government bonds.
C. Business spending on equipment.
D. Personal savings.

14. What happens in a closed economy if saving exceeds investment?


A. Net exports increase.
B. GDP falls.
C. Interest rates fall.
D. Inflation rises.
15. The supply of loanable funds comes from:
A. Investors
B. Borrowers
C. Banks
D. Saving

16. A government budget deficit will:


A. Increase private saving.
B. Increase the supply of loanable funds.
C. Crowds out private investment.
D. Lower interest rates.

17. Frictional unemployment occurs when:


A. There is a recession.
B. Workers are between jobs.
C. Technology replaces labor.
D. Minimum wage is reduced.

18. Structural unemployment is caused by:


A. Temporary layoffs.
B. Skills mismatch. ( excess labor supply)
C. Excess labor demand.
D. Business cycles.

19. The natural rate of unemployment includes:


A. Frictional and structural unemployment.
B. Cyclical unemployment only.
C. Zero unemployment.
D. Only voluntary unemployment.

20. Unemployment insurance may:


A. Increase job turnover.
B. Decrease unemployment.
C. Make job search more urgent.
D. Increase frictional unemployment.

Part 2. True and false questions

True/False Questions provide explanation

1. The Consumer Price Index (CPI) measures the average price of all goods and services
produced in an economy.

False. Beacause not all goods and services, just in your basket ( all good is include
machinery, investment là sai )
2. If nominal GDP increases, it always means that the economy is producing more goods
and services.

False bc ct là nhân với giá current nên cái nào tăng thì chưa biết

3. Real GDP is adjusted for inflation and reflects actual changes in the quantity of goods
and services produced.

True. The formular of real GDP is constant price mutiple with current quantity

4. An increase in the unemployment rate always indicates that the economy is in a


recession.
5. False. Because people move into and out of the labor force so often, statistics on
unemployment are difficult to interpret. On the one hand, some of those who report
being unemployed may not, in fact, be trying hard to find a job. (Sometime it mean
the economy is in a recession.Bút somtiem they found time to frictional even dủing
economic growth)
6. The principle “People respond to incentives” explains why higher taxes on cigarettes can
reduce smoking.

True. Because when the price of cigarettes increased, people won’t buy it anymore

7. Frictional unemployment includes workers who are between jobs or are searching for
their first job.

True. Due to the theory, def

8. Public saving is calculated as government spending minus taxes collected. ( ngc lại mới
đúng là tax trừ gp)

False. National saving – private saving

9. According to the 10 principles of economics, trade can make everyone better off by
allowing specialization and increased efficiency.

True . bc u can focus on what u do best

10. The GDP deflator is used to convert real GDP into nominal GDP.

False. The GDP deflator is used to convert nominal GDP to real GDP

11. In a closed economy, saving must equal investment.

True.

Part 3. Calculation question


Question 1. A basket of goods contains:

 10 units of Good A
 5 units of Good B

Prices:

Year Price of Good A Price of Good B


2020 (Base year) $5 $10
2023 $6 $12

Tasks:

a) Calculate the cost of the basket in 2020 and 2023


b) Calculate the Consumer Price Index (CPI) for 2023 using 2020 as the base year
c) Calculate the inflation rate between 2020 and 2023

Solve
a) Cost of basket 2020: 100
Cost of basket 2023: 120
b) CPI 2023: 90/100 x 100= 120
c) Inflation Rate: 20

Question 2 . An economy produces only two goods: pens and notebooks.

Quantities and Prices:

Year Pens (Qty) Pens ($) Notebooks (Qty) Notebooks ($)


2021 100 $2 200 $5
2023 120 $3 220 $6

Tasks:

a) Calculate nominal GDP in 2023


b) Calculate real GDP in 2023 using 2021 as the base year
c) Calculate the GDP deflator for 2023
d) Calculate the inflation rate between 2021 and 2023

Solve
a) Nominal GDP 2023: 1680
b) Real GDP 2023: 1340
c) GDP Deflator 2023 : 1680/1340 x 100 = 125,4
d) Inflation rate: 25,4

Question 3: Saving and Investment in a Closed Economy

A closed economy has the following data (in billions of dollars):

 GDP = $6,000
 Consumption = $4,000
 Government purchases = $1,200
 Net taxes = $1,000

Tasks:

a) Calculate private saving


b) Calculate public saving
c) Determine national saving
d) What is the level of investment in this economy?

Solve
a) Private saving: 1000
b) Public saving: 200
c) National saving: 800
d)

Question 4: Unemployment Rate and Labor Force Participation

In a country with 40 million adults:

 28 million are employed


 2 million are unemployed
 5 million are full-time students or retired
 The rest are not in the labor force (not seeking work)

Tasks:

a) Calculate the labor force


b) Calculate the unemployment rate
c) Calculate the labor force participation rate

10 mutiple
5 true false ( provide explaination)
10 câu hỏi toán

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