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ECN 1500 Questions with 100% Actual correct answer
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ECN 15001. In the context of the circular flow model, in which market does the supply and demand for
NBA players interact to determine the wages of NBA players?
A. Goods
B. Services
C. Factors
D. Both A and B are correct. - correct answer-C. Factors
1. Which of the following best defines GDP?
A. The income the household sector receives from providing land and labor to the business
sector.
B. The income the household sector receives from providing capital to the business sector.
C. The market value of an economy's production of all goods and services.
D. The market value of an economy's production of final goods and services. - correct
answer-D. The market value of an economy's production of final goods and services.
10. The more the current price is below the equilibrium price, the:
A. greater the resulting shortage will be
B. smaller the resulting shortage will be
C. greater the resulting surplus will be
D. smaller the resulting surplus will be - correct answer-A. greater the resulting shortage will
be
10. What is the economy's net exports?
A. $-5.0
B. $5.0
C. $-10.0
D. $10.0 - correct answer-C. $-10.0
11. Given the following information, what is Aggregate Income?
Employee Compensation $20.0 trillion
Gross Investment 8.0
Net Investment 7.0
Rent 5.0
Transfer Payments 4.0
Interest 5.0
Profits 10.0
A. $20.0
B. $23.0
C. $33.0
D. $40.0 - correct answer-D. $40.0
11. Suppose there is excess demand for a particular good and price starts to rise. What will
the rise in price cause?
,A. a subsequent decrease is the price
B. decrease in quantity demanded
C. increase in quantity supplied
D. Both B and C are correct - correct answer-D. Both B and C are correct
12. During the first quarter of 2020,
A. Real GDP fell by about 25 percent.
B. Real GDP fell by about 5 percent.
C. Nominal GDP increased by about 2 percent.
D. Nominal GDP fell by about 10 percent. - correct answer-B. Real GDP fell by about 5
percent.
12. Prices
A. Change based on changes in supply and demand
B. Allocate resources
C. Answer the question of what to produce
D. All of the above are correct - correct answer-D. All of the above are correct
13. Suppose that nominal GDP doubles while prices double. We can conclude that real GDP
A. more than doubled.
B. doubled.
C. remained constant.
D. Decreased - correct answer-C. remained constant.
13. The distinction between demand and the quantity demanded can be explained by saying
that:
A. demand is represented graphically by a curve and quantity demanded is a point on that
curve
B. the quantity demanded is represented graphically by a curve and demand is a point on
that curve
C. the quantity demanded is in a direct relation with prices, whereas demand is in an inverse
relation
D. the quantity demanded is in an inverse relation with prices, whereas demand is in a direct
relation - correct answer-A. demand is represented graphically by a curve and quantity
demanded is a point on that curve
14. If nominal GDP is $20 trillion and real GDP is $10 trillion, the price index (GDP deflator)
is
A. 0.750
B. 1.125
C. 1.250
D. 2.000 - correct answer-D. 2.000
14. Which of the following would cause quantity demanded to change without changing the
demand curve?
A. A change in income
B. A change in the price of the good
C. A change in tastes and preferences
, D. A change in the price of a substitute good - correct answer-B. A change in the price of the
good
15. Aggregate income includes all of the following except:
A. employee compensation.
B. interest.
C. rent.
D. transfer payments. - correct answer-D. transfer payments.
15. Which statement is not consistent with the law of supply?
A. More of a good will be supplied, the higher the price, other things constant.
B. Less of a good will be supplied, the lower the price, other things constant
C. Quantity supplied of a good is directly related to the good's price
D. Quantity supplied of a good is inversely related to the good's price - correct answer-D.
Quantity supplied of a good is inversely related to the good's price
16. Graphically, a change in price causes:
A. both supply and demand to shift
B. the demand curve to shift
C. a movement along a given supply curve, not a shift
D. the supply curve to shift - correct answer-C. a movement along a given supply curve, not
a shift
16. If nominal GDP is $10 trillion and Price Index (GDP deflator) is 1.25, real GDP is
A. $10.00 trillion
B. $12.50 trillion
C. $8.00 trillion
D. $ 5.00 trillion - correct answer-C. $8.00 trillion
17. A price index in its base year:
A. is always greater than 100 percent.
B. is always equal to 100 percent.
C. is always less than 100 percent.
D. cannot be determined without knowing the price level in the base year. - correct
answer-B. is always equal to 100 percent
17. If the price in a market is above its equilibrium level, there will be a:
A. surplus and downward pressure on price
B. surplus and upward pressure on price
C. shortage and downward pressure on price
D. shortage and upward pressure on price - correct answer-A. surplus and downward
pressure on price
18. Real GDP would increase by 3 percent if nominal GDP increased by:
A. 1 percent and prices increased by 2 percent.
B. 6 percent and prices increased by 2 percent.
C. 2 percent and prices increased by 1.5 percent.
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