The Weekend Quiz – October 15-16, 2022

October 14, 2022
bill
Saturday quiz

Welcome to The Weekend Quiz. The quiz tests whether you have been paying attention or not to the blog posts that I post. See how you go with the following questions. Your results are only known to you and no records are retained.

These were the Quiz questions for the first week of my edx MOOC – Modern Monetary Theory: Economics for the 21st Century – that finished up this week.

I promised students that I would provide answers and analysis for them after the course finished. So over the next 4 weeks that is what I will do as the ‘Weekend Quiz’.

Quiz #629

1. Which of the following would add to GDP in any on period?
1. (a) The purchase of some strawberries from the supermarket.
2. (b) The payment by the national government for public servants in the tax department.
3. (c) The payment by the national government to an aged pension recipient.
4. (d) The purchase of a old model car from a car dealer.
5. (e) The purchase of some house paint by an owner occupier as part of a refurbishment project.
6. (f) The purchase of some house paint by a professional painting tradesperson as part of a refurbishment project.
7. (g) The sale of some military equipment to another country.
8. (h) The purchase of some shares in an airline company.

a, b, e, g
a, b, c, e, g
a, b, c, f, g
a, b, c, d

2. Suppose an economy produces two products: Product A and Product B. This is the data for two years. By how much has the economy grown between Year 1 and Year 2?

Product Year 1 Price Per Unit ($) Year 1 Output (units) Year 2 Price Per Unit ($) Year 2 Output (units)

Product A 1.00 20 2.50 10

Product B 2.00 15 3.00 25

Cannot tell from the information given.
100 per cent
20 per cent
15 per cent
5 per cent

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:

2 per cent
4 per cent
5 per cent
6 per cent

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

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

5. Which nations will be considered to have the highest GDP over the year?
1. (a) 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. (b) 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. (c) 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. (d) 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.