GRADUATE MANAGEMENT ADMISSION TEST (GMAT) MACROECONOMICS EXAMINATION PAPER WITH MODEL ANSWERS SPRING EXAMINATION MAY 2026

GRADUATE MANAGEMENT ADMISSION TEST
(GMAT)
MACROECONOMICS EXAMINATION PAPER WITH MODEL
ANSWERS

SPRING EXAMINATION MAY 2026



Duration: 3 Hours
Instructions:


Answer ALL questions in Section A.
Answer ANY THREE questions in Section B.
Use relevant economic examples and diagrams where necessary.




SECTION A — SHORT ANSWER QUESTIONS (40 Marks)
Question 1 (5 Marks)

Define the following economic terms:
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a) Inflation

, b) Gross Domestic Product (GDP)

c) Fiscal Policy

d) Monetary Policy

e) Unemployment



Answers


a) Inflation is the continuous rise in the general price level of goods and services over time.



b) Gross Domestic Product (GDP) is the total monetary value of final goods and services
produced within a country during a given period.



c) Fiscal policy refers to government use of taxation and public expenditure to influence the
economy.



d) Monetary policy is the regulation of money supply and interest rates by the central bank.



e) Unemployment is the condition in which individuals willing and able to work cannot find jobs.



Question 2 (5 Marks)


State five causes of inflation.


Answer
2




Increase in money supply
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