C719 MACROECONOMICS PRE-ASSESSMENT QUESTIONS AND ANSWERS 2022/2023

C719 Macroeconomics Pre-Assessment Questions According to the production possibilities curve model, as you increase the production of one good. What will happen to the sacrifices of the alternate good? A farmer fully utilizes his resources to produce cauliflower and kale. As the farmer produces more cauliflower. So he has fewer resources available to produce kale.Which curve is illustrated in this scenario? What are the main foci of economics? Study the two-sector circular-flow diagram.Classify each statement as either a flow of resources or a flow of dollars. As a result Answer options may be used more than once or not at all. Select your answers from the pull-down list. FLORENCE COULD EARN AN ANNUAL SALARY OF $70,000 AS A FINANCIAL ADVISOR OR $60,000 AS A BANK MANAGER. Currently, Florence is a teacher and earns an annual salary of $35,000. What is Florence’s opportunity cost for choosing to be a teacher instead of a financial advisor? Florence is a teacher and earns $35,000 a year. Her spouse is a part-time IT specialist who earns $45,000 a year. Because Florence and her spouse decide that one of them should quit work and become a stay-at-home parent. Based on the principle of comparative advantage, who should be the full-time, stay-at-home parent? REFERRING TO THE THREE ECONOMIC QUESTIONS (WHAT, HOW, AND FOR WHOM), IN A MARKET SYSTEM, BY WHOM ARE THESE QUESTIONS DETERMINED? In the car manufacturing industry, the supply for cars has a positive slope.What happens if the price of cars increases? In the car manufacturing industry, the supply for cars has a positive slope.Which two factors can cause the supply curve to shift? Textbooks and class enrollments are complements.What happens to the demand curve for textbooks if the tuition rate increases? Below are likely scenarios that affect the demand curve for automobiles. Which scenario is correct? Classify each option as either increasing or decreasing if the price of tablets is expected to go down. As a result answer options may be used more than once or not at all. Select your answers from the pull-down list. A drought in Columbia destroyed the rice crops, which caused the supply of rice to decrease. Which scenario will occur as a result of the decrease in supply? The maximum number of skilled and unskilled workers are employed in an economy. WHAT TYPE OF EMPLOYMENT IS THIS? In January, Harry was laid off from his job, and he immediately began seeking employment. In May, he stopped looking for a job. It is now July, and he is still receiving unemployment benefits. How would you classify Harry’s employment status? A country has a population of 50,000,000 people and a labor force of 20,000,000 people. The unemployment rate is 9.5%.How many people are unemployed in this country? An economist gave a lecture on economic fluctuations. When a student said that inflation hurts everyone. So the economist said that this is not necessarily true.Who would most likely benefit from inflation? A business owner is creating a sales forecast for the next year. She chose to monitor the consumer price index for indications of inflation. Therefore, she is worried that there may be drawbacks to this index. What is a limitation faced by the owner in using the consumer price index? The Federal Reserve recently announced that it will promote an expansionary policy. It is expected that output will increase. Which event will also occur as a result? ASSUME THE FOLLOWING: Personal consumption expenditures = $20,000 Gross private domestic investment = $4,000 Government purchases of goods and services = $6,000 Exports = $4,400 Imports = $4,400 what is GDP equal to? While GDP is useful for evaluating a standard of living, it does not account for the side effects of increased production. What is an example of a side effect that is not included in GDP? Country Y is a large country with a population of 100,000. It has a low standard of living, as reflected by its real GDP per capita of $50.What is the GDP of Country Y? In the aggregate demand curve, what explains the negative relationship between price level and real output? WHICH EVENT WOULD CAUSE THE AGGREGATE DEMAND CURVE TO SHIFT TO THE RIGHT? According to the law of diminishing productivity, if capital stock is fixed, what will happen to marginal productivity with each additional worker? Heather is watching the news and expresses her frustration with the Federal Reserve’s inability to control the economic recession over the past five years. Her frustration stems from her belief that the government cannot time its policies to react quickly enough to the stagnating economy.What kind of economist is Heather? At the end of World War II, people feared that another economic recession would occur.What did Keynesian economists encourage as a means of avoiding another recession? When wages are lower, production yields the same output, but at a lower cost. The lower costs allow the firm to hire more workers and increase output. Sellers will have to reduce prices to sell the extra output.How is this advantageous to a seller? ACCORDING TO KEYNES, HOUSEHOLD SPENDING HABITS ARE STABLE. Which factor has the most significant impact on consumer spending, according to Keynes? According to Keynes, what is the only way to bring the economy out of a downturn as severe and prolonged as the Great Depression? The nation is entering a recession. The classical economist says the government should do nothing and the market will correct itself eventually.What would the Keynesian economist suggest? Why do classical economists believe that the government should not become involved with markets during an economic downturn?