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MACRO midexam

This document is a mid-exam for 3rd Year BUMA students in Macroeconomics, covering various topics such as GDP, inflation, and economic cycles. It includes general instructions, multiple-choice questions, true/false statements, and a section requiring calculations based on provided economic data. The exam is designed to assess students' understanding of macroeconomic principles and their ability to apply them.

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Teklu Nega
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6 views5 pages

MACRO midexam

This document is a mid-exam for 3rd Year BUMA students in Macroeconomics, covering various topics such as GDP, inflation, and economic cycles. It includes general instructions, multiple-choice questions, true/false statements, and a section requiring calculations based on provided economic data. The exam is designed to assess students' understanding of macroeconomic principles and their ability to apply them.

Uploaded by

Teklu Nega
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF BUSINESS MANAGEMENT

Macroeconomics Mid-Exam for 3rd Year BUMA Students

Instructor Name: Teklu N. (MSc. in Applied Statistics) Total Mark: 30%


Time allowed: 1:20 hour Course Code: Econ203 ECTS: 5
Exam date: 23/09/2017 E.C Program: Extension Semester: I

Name___________________ _______ID No. ___________Section____________

GENERAL INSTRUCTION:

1. Switch your cell phone


2. Write your name before you begin
3. You can use calculator.
4. Make sure your exam paper has five page including cover page.
5. Make sure your exam has three part
6. Any form of cheating or attempt will nullify your result.
7. Put your answer in the provided space only, unless your mark will be null

Good luck!!

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Part-I: Say True or False (1pts each)

1. Microeconomics focuses on the behavior of the economy as a whole.


2. A recession is characterized by a decrease in economic activity, including employment and
investment.
3. The GDP deflator is used to measure changes in the average price level of a fixed basket of
goods and services.
4. Structural unemployment occurs due to short-term job searching and transitions.
5. A rightward shift in the IS curve can be caused by increased government spending.
6. The LM curve shifts upward when the central bank decreases the money supply.
7. GDP includes the value of intermediate goods to reflect full production value.

Part-II: Choose the best answer(1pts each)

8. Which of the following is NOT a goal of macroeconomics?


A) Stable inflation B) Full employment C) Profit maximization D) Economic growth
9. Which phase of the business cycle is characterized by high output and employment?
A) Trough B) Recession C) Peak D) Recovery
10. Which type of inflation occurs due to excessive demand?
A) Cost-push B) Structural C) Demand-pull D) Built-in
11. Which of the following is a component of GDP using the expenditure approach?
A) Subsidies B) Transfer payments C) Depreciation D) Government purchases
12. The IS curve represents equilibrium in which market?
A) Labor market B) Money market
C) Goods and services market D) Foreign exchange market
13. An upward shift of the LM curve is caused by:
A) Increase in taxes B) Decrease in interest rate
C) Decrease in money supply D) Increase in income
14. In the short run, if aggregate demand increases, national income will:
A) Remain the same B) Increase C) Decrease D) Become zero

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15. Which of the following reduces the purchasing power of money?
A) Deflation B) Inflation C) Budget surplus D) Recession
16. What does the GDP deflator measure?
A) Total employment B) Nominal interest rate
C) Price level changes D) Income tax
17. The LM curve is based on the theory of:
A) Absolute advantage B) Liquidity preference
C) Effective demand D) Marginal utility
18. If the MPC is 0.75, the government spending multiplier is:
A) 3 B) 4 C) 2 D) 1
19. Unplanned inventory accumulation implies that:
A) Sales > production B) Production > sales
C) Prices are rising D) Taxes have increased
20. Which is NOT included in GDP?
A) Personal consumption B) Business investments
C) Illegal transactions D) Government purchases
21. Which curve shows the combinations of interest rate and income in money market
equilibrium?
A) IS curve B) LM curve C) AS curve D) AD curve
22. Which factor does NOT cause the IS curve to shift?
A) Change in taxes B) Change in investment
C) Change in money supply D) Change in government spending

Part-III: Workout show necessary step

A country has the following data:

Cost of a fixed basket of goods in 2022 (base year): 600 Cost of the same basket in
2023: 750
Personal Consumption (C) = 500 Investment (I) = 200
Government Expenditure (G) = 300 Exports (X) = 100
Imports (M) = 150 Depreciation = 80
Net Factor Income from Abroad (NFI) = 50 Indirect Business Tax (IBT) = 40

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Subsidies = 20

a. Calculate the Consumer Price Index (CPI) for 2023 and the Inflation Rate from 2022 to
2023(3pts)
b. Compute GDP using the expenditure approach (3pts)
c. Calculate Net Domestic Product (NDP), Gross National Product (GNP), and National
Income (NI) (4pts)

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