Exam MX - 1. Ceteris Limited buys $100 000 of sand, rock...

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1. Ceteris Limited buys $100 000 of sand, rock and cement to produce pre-mixed concrete. It sells 10 000 cubic metre of concrete at $30 a cubic metre. The value added by Ceteris Limited is: (a) $300 000. (b) $100 000. (c) $30 per cubic metre. (d) $200 000. (e) zero dollars. 2. Real GDP measures: (a) current output valued at current prices. (b) current output valued at base year prices. (c) base year output valued at current prices. (d) current prices valued at base year levels. (e) none of the above. 3. Dean voluntarily quit his job, as an insurance agent, to return to university full- time and earn an MBA degree. With degree in hand, he is now searching for a position in management which he is prepared to take up immediately. Dean presently is: (a) cyclically unemployed. (b) structurally unemployed. (c) not a member of the labour force. (d) fractionally unemployed. (e) frictionally unemployed. 4. If the unemployment rate is 9% and the natural rate of unemployment is 5.5%, then the (a) frictional unemployment rate is 5.5%. (b) cyclical unemployment rate is 3.5%. (c) cyclical unemployment rate and the frictional unemployment rate together are 5.5%. (d) the true rate of unemployment is 14.5%. (e) natural rate of unemployment will eventually increase. 5. Recently a trade union argued that the standard of living of its members was falling. A critic of the union argued that this could not possibly be true because the union had been gaining significant increases in the nominal incomes of its members through collective bargaining. Is the critic correct? (a) Yes, because when you have a large nominal income your standard of living automatically increases. (b) No, because real income may fall if price increases are proportionately more than the increase in nominal income. (c) No, because real income may fall if price increases are proportionately less than the increases in nominal income. (d) No, because collective bargaining is unable to raise real incomes. (e) Yes, because real income may fall if price increases are proportionately less than the increases in nominal income.
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6. Mrs Chen's shares have been yielding a nominal rate of return of 12 per cent. If the rate of inflation is running at 6 per cent, the real rate of return on her shares is (a) 18 percent. (b) 6 percent. (c) -18 percent. (d) -6 percent. (e) 12 percent. 7. The rate of inflation can be found by: (a) subtracting this year's price index from last year's price index and dividing the difference by this year's price index. (b) subtracting last year's price index from this year's price index. (c) multiplying this year’s price index by 100 and dividing it by last year’s price index. (d) subtracting last year's price index from this year's price index and dividing the difference by last year's price index. (e)
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Exam MX - 1. Ceteris Limited buys $100 000 of sand, rock...

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