Week One - Quiz Time

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Now, let's see if you were paying attention.

The following questions will be about the material that we have been unpacking and discussing this week. There is a little bit of number-crunching, so you might want to have your calculator ready.

So get your pencil and paper out and record your answers. Once you are finished you can check the answers and explanations. It is obviously best to do the quiz first to test your progress before checking the results. There are no prizes here.

Take your time, and best of luck!

Question 1: Which of the following would add to GDP in any one period?

1. The purchase of some strawberries from the supermarket.
2. The payment by the national government for public servants in the tax department.
3. payment by the national government to an aged pension recipient.
4. The purchase of an old model car from a car dealer.
5. The purchase of some house paint by an owner occupier as part of a refurbishment project.
6. The purchase of some house paint by a professional painting tradesperson as part of a refurbishment project.
7. The sale of some new military equipment to another country.
8. The purchase of some shares in an airline company.

Question 2: By how much has the economy grown between Year 1 and Year 2?

Suppose an economy produces two products: Product A and Product B. This is the data for two years about that economy.

1. 5 per cent.
2. 15 per cent.
3. 20 per cent.
4. 100 per cent.
5. Cannot tell from the information given

Question 3: If the output an economy can achieve when all resources are productively employed is $120 billion and in the current year actual real GDP is on $114 billion, the output gap would be:

1. 2 per cent.
2. 4 per cent.
3. 5 per cent.
4. 6 per cent.

Question 4: The reason that economy-wide wage cuts will not reduce unemployment relates to the observation that:

1. Wages are both an income to workers and a cost to firms.
2. Workers will go on strike if their wages are cut.
3. Cutting wages will reduce import expenditure.
4. Firms know that if they cut wages, they will damage their reputation.

Question 5: Which nations will be considered to be producing the most over a year?

1. A military-inclined nation that produces $130 billion worth of new tanks and jet fighters in addition to $100 billion worth of all other final goods and services.
2. A nation that produces no military equipment, but instead, creates a new renewable industry that produces $200 billion worth of new solar panels, pays $20 billion out to old aged pensioners, and produces and additional $30 billion worth of all other final goods and services.
3. A social democratic nation that produces $10 billion worth of new military equipment, builds $50 billion worth of new schools and universities, and produces an addition $170 billion worth of all other final goods and services.
4. A nation where the government spends $40 billion in environmental restoration projects, businesses purchase new machinery and equipment worth $30 billion, export sales to the rest of the world equal $60 billion and consumers purchase $100 billion worth of final goods and services.

You can access the answers and detailed analysis from this page - The Weekend Quiz – October 15-16, 2022 – answers and discussion (October 15, 2022).