HUMAN WANTS These are the goods and services needed by human beings.

MACROECONOMICS This division of economics deals with the problem of the whole economy and how
aggregated economic units or sectors are interrelated

GROSS DOMESTIC PRODUCT GDP is defined as the total value of final goods and services produced in an
economy.

CETERIS PARIBUS A Latin word which means all other things are held constant.

MARKET STRUCTURE It refers to features of a market, including the number of firms in the market, the
distribution of market shares between them, product uniformity across firms, how easy it is for firms to enter and
exit the market, and forms of competition in the market.

SHORTAGE Excess demand happens when the quantity demanded exceeds the quantity supplied. What is its
owner name?

ECONOMIC RESOURCES These resources are those with price tag because they are scarce.

PER CAPITA INCOME This is arrived at by dividing the National Income (or GNP) by Population of a country.

COORDINATION An important word in the definition of the term economics which refers to how the three most
important problems facing any economy are solved

SUPPLY AND DEMAND MODEL / SUPPLY AND DEMAND This model describes how prices vary as a result
of a balance between product availability and demand.

FISCAL POLICY There are two macroeconomics policies, one is monetary policy. What is the other one?

DEMAND SCHEDULE Listing of the different quantities of goods and services that buyers will purchase given
the various alternative prices.

RESOURCES It refers to the factors or inputs of production

TRADE-OFF is the giving up of one thing to get another

OPPORTUNITY COST is the value of the best thing we give up to get something.

MICROECONOMICS is the study of the behavior of individuals, firms, or a few markets.

EQUILIBRIUM PRICE is the price where the quantity demanded is equal to quantity supplied.

LAISSEZ FAIRE ECONOMY Capitalism refers to a free enterprise (no government intervention). It is also called

DUOPOLY is a type of market structure where there are two sellers controlling the market

STANDARD OF LIVING refer to level of education and literacy, workers’ income, health and lifespans)

DEMAND SCHEDULE is the listing of the different quantities of goods and services that buyers will purchase
given the various alternative prices.

DEMAND is the schedule of various quantities of goods and services which the buyers are willing and able to
purchase at a given price, time and place, all other factors are held constant.
MACROECONOMICS deals with the study of topics such as GDP, unemployment rates, national income, price
indices, output, consumption, unemployment, inflation, saving, investment, energy, international trade, and
international finance.

LUXURY GOODS Classification of goods that contribute to man’s comfort and well-being.

PERFECT COMPETITION A type of market structure where a large number of small firms compete against each
other with homogeneous products.

CONSUMER GOODS Classification of goods that yield direct satisfaction.

MONOPOLISTIC COMPETITION A type of market where a large number of small firms compete against each
other with differentiated products.

ESSENTIAL GOODS Classification of goods that are the basic needs of man.

CAPITAL It is anything that is used to produce other goods and services.

MONOPOLY A type of market structure where a single firm controls the entire market. *

OLIGOPOLY A type of market structures where a small number of firms compete against each other.

ENTREPRENEURSHIP A classification of resources which has the ability to organize and coordinate land, labor,
and capital

CAPITAL GOODS Classification of goods that are used in the production of other goods and services.

ECONOMICS is defined as a social science which deals with the proper allocation and efficient use of available
resources for the maximum satisfaction of human wants.

ECONOMIC SYSTEM is the economic structure of a given economy

SOCIALISM is model of economic system also called mixed economy

A general price decrease across the entire economy is called DEFLATION

TRADE is the exchange of goods and resources between people or between geographic regions.

COMMUNISM is opposite of capitalism wherein the government controls the economy.

SUPPLY is a schedule of various quantities of goods and services which sellers are willing and able to sell at a
given price, time and place, ceteris paribus.

SURPLUS will occur if the sellers raise their price too high, where the demand is less than what they have to offer.

In a CAPITALIST economy, the interaction of demand and supply of goods and services determine the price of
goods and services.

ECONOMIC DEVELOPMENT is all about improving living standards.

Calculate the quantity demanded if the price is P25 assuming the following equation: Qdx = 20-0.40Px Qdx=10

Calculate the quantity supplied if the price is P25 assuming the following equation:
Qsx = -10+0.60Px Qsx =5
TAKE-OFF STAGE It is one of the stages of the Rostow's Stage of Growth wherein there is greater urbanization
and rise in human capital accumulation.

NEO-CLASSICAL, FREE MARKET COUNTERREVOLUTION This theory favors privatization of

government corporations.

CAPITAL OUTPUT RATIO / COR It is a measure on how much capital is required for production and output and
is expressed by the formula K/Y.

INTERNATIONAL-DEPENDENCE REVOLUTIONThis theorizes that there is a difficulty for poor nations to

self-reliant and independent.

HARROD-DOMAR GROWTH MODEL / HARROD-DOMAR GROWTH The underlying assumption of this

model is that savings and investment are the key determinant of growth.

PATTERN OF DEMAND THEORY This theory defines economic development as a set of interrelated changes in
underdeveloped economy required for its transformation from an agricultural economy into an industrial economy.

TWO SECTORS SURPLUS LABOR THEORETICAL MODEL Under this model, excess labor migrates to
urbanized area and there is a transfer of labor from traditional to modern.

NEO-COLONIAL DEPENDENCE MODEL This model distinguishes between two groups of countries known as
"Center-Periphery".

FALSE PARADIGM MODEL / FALSE PARADIGM This model attributes lack of development to inappropriate
advices from rich countries economists.

ROSTOW'S STAGES OF GROWTH MODEL This growth model asserts that there are five series of stages in
the transition into development.

The LINEAR STAGES-OF-GROWTH model was inspired by the Marshall Plan of the United States which was
used to rehabilitate Europe's economy after World War 2 crisis.

The Two Sectors Surplus Labor Theoretical Model was developed by W. ARTHUR LEWIS

DUALISM is a divergence between rich and poor nations, rich and poor people on various levels.

The NEO-CLASSICAL, FREE MARKET COUNTERREVOLUTION model emerged in the 1980s during the
political ascendency of conservative government of the US, Canada, Britain and West Germany.

At the STAGE OF MASS CONSUMPTION, a country’s demand shifts from food, clothing and other basic
necessities to demand for luxuries.

The HOLLIS CHENERY model utilizes the assumption that there are shift from agricultural to industrial
production and steady accumulation of physical and human capital.

The classic theories of economic development is composed of FOUR approaches.

MARSHALL PLAN was used to rehabilitate Europe’s economy after the Post-World War 2 crisis.

DRIVE TO MATURITY is the fourth stage in Rostow’s Stages of Growth Model .

DEVELOPMENT ECONOMICS is a field of economics that examines economic development particularly the
alleviation of absolute poverty and allocation of resources in developing countries.
ECONOMIC DEVELOPMENT is the process by which emerging economies become advanced economies -
countries with low living standards become higher.

There are two growth models in the Linear Stage-of-Growth Theory, Rostow’s Stages of Growth Model and
HARROD-DOMAR GROWTH MODEL

The International-Dependence Revolution gained support because of disenchantment with STAGES AND
STRUCTURAL-CHANGE Models

NEO-CLASSICAL, FREE MARKET COUNTERREVOLUTION theory argues that state intervention slows
economic growth.

DUALISTIC-DEVELOPMENT THESIS conceptualized that in interrelations, the superior elements do little or

nothing to pull up the inferior elements, and may push them down.

One of the essence of INTERNATIONAL-DEPENDENCE REVOLUTION theory is that there is difficulty for
poor nations to self-reliance and independent.

INTERNATIONAL-DEPENDENCE REVOLUTION theory gained support because of disenchantment with

stages and structural-change models.

DRIVE TO MATURITY is one of the stages of growth wherein national income or GNP versus population
increases over-all.

The Linear Stage-of-Growth Model is an attempt by economists to come up with a concept to transform
AGRARIAN economy to industrialized one.

Which of the following is not a pattern of demand analysis that accompanies development? Sufficient investment
thru savings

The argument in this theory is that underdevelopment resulted from poor resources allocation because of incorrect
pricing policies and government intervention. NEO-CLASSICAL, FREE MARKET COUNTERREVOLUTION

According to W. W. Rostow, this is the stage in which the population is involved in agriculture and takes place after
a long period of time. Drive to Maturity

According to this theory of development, a shift from agriculture to industry and services tend to occurs as a country
develops. STRUCTURAL CHANGE MODEL

Which is accumulated in the Pattern of Demand Analysis? Physical and Human Capital

It helps explain growth that derives from anything except increases in the size of the labor force of or the capital
stock. NONE OF THE ABOVE

Which of the following statement is consistent with Neo-Colonial Dependence Model?

Indirect outgrowth of Marxist thinking

This theory supports eliminating government regulations. NEO-CLASSICAL, FREE MARKET

COUNTERREVOLUTION

If the output is 10K and the capital is 50K, the COR is: 5

This theory challenges Stalist models in favor of free markets, public choice and market-friendly approaches. NEO-
CLASSICAL, FREE MARKET COUNTERREVOLUTION
A case where workers take on jobs that are below their skill level. *

UNDEREMPLOYMENT

A type of unemployment when there is not enough aggregate demand in the economy to provide jobs
for everyone who wants to work. *

CYCLICAL

The second important input to production. *

CAPITAL

Refers to the economic situation in which an individual who is actively searching for employment is
unable to find work. *

UNEMPLOYMENT

An office which collates data on market demographics, life expectancy, health care, unemployment
benefits, poverty, and income distribution, among others. *

INTERNATIONAL LABOR OFFICE

This is the level of employment rates where there is no cyclical or deficient-demand unemployment. *

FULL EMPLOYMENT

Defined as the number of unemployed persons divided by the number of persons in the labor force. *

UNEMPLOYMENT RATE

The rate at which factories and machines are functioning compared to the maximum sustainable rate at
which they could be used implies how much capital is ready to be used for economic growth. *

CAPITAL UTILIZATION RATE

A type of unemployment where workers are only considered unemployed if they are looking for work so
those without jobs who have stopped looking are no longer considered unemployed. *

HIDDEN

A portion of the labor force who are currently working for pay. *

EMPLOYED

This states that a one-percent point change in the unemployment rate will bring about output in the
economy to change in the opposite direction by two percent. *

OKUN'S RULE OF THUMB

A solution that helps reduce unemployment where the government is funding employment of the able-
bodied poor. *
DEMAND SIDE SOLUTIONS

Economists refer to this group of labor force as those who are not working and not looking for work. *

OUT OF THE LABOR FORCE

Unemployment is calculated as a percentage by dividing the number of unemployed individuals by the

number of all individuals currently employed in the workforce. What do you call its final measurement?

RATE OF UNEMPLOYMENT

Examples of this unemployment solution include cutting taxes on businesses, reducing regulation, and
increasing education. *

SUPPLY SIDE SOLUTIONS

Some employees are unable to find regular employment and work fewer hours than what is considered
normal in their field or industry although they possess the skills to work in a full-time position. It is called
_________________ underemployment. *

VISIBLE

_________________ is defined as an acceptable level of unemployment somewhere above 0%. *

FULL EMPLOYMENT

_________________ unemployment occurs when a worker is searching for work or transitioning from
one job to another. *

FRICTIONAL

A situation where there is a mismatch between the employment opportunities and the skills and
education level of the employees is called ___________________. *

UNDEREMPLOYMENT

Underemployment also includes people with full-time employment but who live below the poverty line.
They are known as the _______________. *

WORKING POOR

Unemployment that lasts longer than 27 weeks even if the individual has sought employment in the last
four weeks is called ____________________. *

LONG-TERM UNEMPLOYMENT

This output that would become visible at the target rate of unemployment and target rate of capacity
utilization is called ______________________. *

POTENTIAL OUTPUT

________________ employment is defined as those usually lasting longer than one year. *

LONG-TERM
The output that could have been produced by the unemployed workers is called the _______________
of unemployment. *

OPPORTUNITY COST

The number of employed plus the unemployed is referred to as the ________________. *

LABOR FORCE

Working age in the labor force is from ________ years and above. *

16

When individuals accept employment below their skill level the economies efficiency is reduced further.
Thus, workers lose skills which causes a loss of _________________. *

HUMAN CAPITAL

______________ unemployment occurs when there is a mismatch between the skills of the unemployed
workers and the skills needed for available jobs. *

STRUCTURAL

_____________________ underemployment refers to people who work in jobs that don’t utilize their
skills – such as a financial analyst working as a waiter in a restaurant. *

INVISIBLE

The unemployment rate is defined as the number of unemployed persons divided by the number of the
overall adult population. TRUE or FALSE? *

FALSE

Assume that a country has a total population of 235.7 million. There are 9.8 million children and 6.7
million retirees who are not working. Additional statistics revealed that there are 12.9 unemployed and
77.7 million other out-of-labor forces. What is the percentage of employed population (Answer to be
rounded off to the nearest 2 decimal places). (5 POINTS) *

90.88%

Using the data from Problem Solving No. 1, what is the percentage of the total persons out of the labor
force? (Answer to be rounded off to the nearest 2 decimal places). (5 POINTS). *

39.97%

Using the data from Problem Solving No. 1, what is the unemployment rate? (Answer to be rounded off
to the nearest 2 decimal places). (5 POINTS) *

9.12%
Economic output in 2021 was Php23,000,000. If unemployment rate is projected to decrease by two
percent (2%) from six percent (6%) in 2021 to four percent (4%) in 2022, how much will be the projected
economic output in 2022 under the Okun's rule of thumb using the 2021 output? (Omit the peso sign)(5
POINTS). *

23,920,000

Expansionary monetary policy increases aggregate demand which could fuel inflation pressures in the
domestic economy. *

TRUE

Bills and coins are included in the calculation of M3 or Broad Money Liabilities. *

TRUE

The reserve requirement in the Philippines for rural banks and thrift banks are 3 percent and 2 percent,
respectively. *

FALSE

Central banks tend to reduce the interest rates when they want to increase investment and
consumption in the economy. *

TRUE

Contractionary monetary policy lowers aggregate demand which could eventually tempers inflation
pressures in the domestic economy. *

TRUE

In a repurchase transaction under open market operations, a central bank creates new money and uses
that to purchase assets from commercial banks. *

FALSE

Price stability is defined as a general increase in prices and fall in the purchasing value of money. *

FALSE

Fuel items are excluded In the calculation of Consumer Price Index (CPI). *

TRUE

If the velocity of M1 and M2 money stock has been high, this indicates that there is a lot of money in
consumers' hands and not changing hands frequently. *

FALSE
Expansionary monetary policy is used to slow inflation, while contractionary monetary policy is used to
combat unemployment. *

FALSE

A central bank regulation that sets the minimum amount of reserves that must be held by a commercial
bank. *

RESERVE REQUIREMENT

It is calculated by summing all the following components: cash in hand of the public, peso demand
deposit, tourists’ checks from non-bank issuers, and other checkable deposits. *

M1

M1: NARROW MONEY

Defined as all indebtedness in respect of borrowed money maturing on demand or within one year from
the date of creation thereof. *

SHORT-TERM BORROWING

The situation whereby the prices of goods and services offered in the market place either change slowly
or do not change at all. *

PRICE STABILITY

Defined as a situation in which there are zero nominal interest rates, persistent deflation and deflation
expectations. *

LIQUIDITY TRAP

The risk that the loan will not be paid on time or in full. *

DEFAULT RISK

It is one of the concept used by lenders to set base interest rates by using four components: cost of
funds, operating costs, premium for default risk and bank's targeted profit margin. *

COST-PLUS LOAN-PRICING MODEL

It focuses on maintaining a low level of inflation, that which is considered to be optimal, or at least
would allow the country to have ample economic growth. *

INFLATION TARGETING

It is the entire stock of currency and other liquid instruments circulating in a country’s economy as of a
particular time which include cash, coins and balances held in checking and savings account. *

MONEY SUPPLY
It is a monetary policy of printing money, that is implemented by the Central Bank to energize the
economy by buying government securities and longer term assets to lower interest rates and increase
the money supply. *

QUANTITATIVE EASING

are sophisticated computer programs used to evaluate potential borrowers and to underwrite all forms
of consumer credit, including credit cards, installment loans, residential mortgages, home equity loans
and even small business lines of credit. *

CREDIT-SCORING SYSTEMS

_________________ monetary policy is used by a central bank to slow down economy and drive down

CONTRACTIONARY

In accordance with Republic Act No. 265, the primary objective of Bangko Sentral ng Pilipinas (BSP)'s
monetary policy is to promote _______________ . (Two words). *

PRICE STABILITY

Interest rate charged by banks in pricing their different customers is called _________________. *

BASE RATE

A credit facility provided by BSP to help banks meet temporary liquidity needs by refinancing the loans
they extended to their clients is called __________________. *

REDISCOUNTING

_____________ monetary policy is used by a central bank to speed up the economy and combat
unemployment. *

EXPANSIONARY

_________________ is generally the process by which the central bank, or government controls the
supply and availability of money, the cost of money, and the rate of interest. *

MONETARY POLICY

___________________ contain necessary information for predicting future behavior of prices and
assessing economic activity and are used by economists to forecast trends in consumer price inflation. *

MONEY SUPPLY INDICATOR

In the Philippines, the reserve requirement, the amount of cash a bank must hold in reserve against
their deposit liabilities, is currently at _______ percent for commercial and universal banks. *

12
The amount of reserves that the banks are free to loan out is called ___________________. (Two words)
*

EXCESS RESERVES

An open market operations facility where there is no clear intent by the government to reverse the
action of their selling or buying of monetary securities and thus, creates a more permanent effect on our
monetary supply. *

OUTRIGHT TRANSACTIONS

Almost all short-term, highly liquid assets will be included in this measure. *

LIQUIDITY MONEY

Reserve requirement is a central bank regulation that sets the minimum amount of reserves that must
be held by a commercial bank. It is also known as

CASH RESERVE RATIO

A useful tool in setting an appropriate default premium when determining the rate of interest charged
to a potential borrower.

CREDIT SCORING

A component of cost-plus loan-pricing model which include application and payment processing, and
the bank's wages, salaries and occupancy expenses.

OPERATING COSTS

It consists of fixed terms deposits by banks and institutions affiliated with the BSP.

SPECIAL DEPOSIT ACCOUNTS

In this facility, the government acts as the seller, and works to decrease the liquidity of money. These
transactions usually have maturities ranging from overnight to one month

REVERSE REPURCHASE

This measure includes peso savings and time deposits, among others

BROAD MONEY

The goals of monetary policy focus on the following except:

LOW EMPLOYMENT RATE

Refers to the actual exchange of two currencies at a specific date, at a rate agreed upon the deal date
and the reverse exchange of the currencies at a farther rate in the future.

FOREIGN EXCHANGE SWAPS

A bank receives a loan application for P10 Million. Compute the base interest rate (base rate) under the
cost-plus, loan-pricing model assuming the following: desired profit margin-1.5%, prime rate-3%,
operating costs-1.5%, cost of funds-1.75%, price leadership rate-2% and premium for default risk-2.25%.
(Omit the decimal points but don't forget the % or percent) *

7%

Compute the amount of Broad Money (M2) from the following: unused traveler's check-15,225,
approved bank's credit line-10,000, bills on hand-1,975, checking account-11,250, money market mutual
fund-20,000, savings and time deposit balance-50,000 and balance of credit card-50,000. (Don't forget
the comma but omit the decimal points and peso sign). *

98,450

Fiscal policy generally has a greater impact on consumers. It can lead to increased employment and
income. *

TRUE

The allocation function of public finance deals with public goods which are non-exclusive. *

TRUE

After the Philippine House of Representative has approved the General Appropriation Bill (GAB), it is
forwarded to the President for signing into law. *

FALSE

Fiscal policy deals with the money supply and interest rates. *

FALSE

Tax cuts implemented under the expansionary fiscal policy decrease the purchasing power of residents
in a country. *

FALSE

A budget surplus occurs when current expenses is lesser than current revenues. *

TRUE

Former Filipino citizens who bring imported goods into the Philippines are exempted from paying duties
and tariff. *

TRUE

Taxes imposed from rent and income from government properties are very minimal. *

FALSE
The General Appropriation Bill is approved on 3rd reading. *

TRUE

Funds from the approved budget is released by the Bureau of Treasury (BTr). *

FALSE

SAP is a general cash subsidy by the Duterte Administration aimed at putting money in the hands of
those negatively affected by quarantine measures. What is the meaning of SAP? *

SOCIAL AMELIORATION PROGRAM

Fiscal policy is based on the theories of this British economist. (Full Name)(First name first) *

JOHN MAYNARD KEYNES

A form of sales tax that is imposed on the sale of goods and services and on the import of goods into the
Philippines. (No abbreviation) *

EXPANDED VALUE ADDED TAX

In the Philippines, it manages the finances of the government, by attempting to maximize revenue
collected and minimize spending. (No abbreviation) *

BUREAU OF TREASURY

This is undertaken by the government if it believes there is not enough business activity in an economy
by increasing the amount of money it spends. *

STIMULUS SPENDING

A type of fiscal policy which is most appropriate when an economy is in recession and producing below
its potential Gross Domestic Product (GDP) . *

EXPANSIONARY FISCAL POLICY

It refers to methods and practices of government planning, adopting and executing financial policies and
programs. *

BUDGETING

The 3 major recipients of the national government budget are: 1. The NGAs (National Government
Agencies), 2. The LGUs (Local Government Units) and 3. The GOCCs. What is the meaning of GOCCs? *

GOVERNMENT OWNED AND CONTROLLED CORPORATIONS

An economic measurement of the sum of all final goods and services produced in an economy,
expressed as the total amount of money exchanged for those goods and services. *

AGGREGATE DEMAND

It deals with taxation and government spending and is often administered by a government department.
*

FISCAL POLICY

This occurs when the government receives more money in taxes than it spends in a year. *

BUDGET SURPLUS

A type of fiscal policy usually undertaken when an economy is in neither a recession or an expansion. *

NEUTRAL FISCAL POLICY

It consists of collection of fees and licenses, privatization proceeds, and Income from other state
enterprises. *

NON-TAX REVENUE

A type of budget where government spending and taxes are equal. *

BALANCED BUDGET

The objective of this function of public finance is to eliminate or least reduce business fluctuations and
its impact on the economy. *

STABILIZATION FUNCTION

is the study of of government policies on the economy. *

PUBLIC FINANCE

RA 11469 is one of the major pieces of legislation passed as a response to the COVID-19 pandemic in the
Philippines. It is commonly known as _______________ ACT. *

BAYANIHAN TO HEAL AS ONE

When the government is spending more money than it collects in tax revenues, it is referred to as
________________. *

DEFICIT SPENDING

A plan of expressing in monetary terms the operating program and means of financing of a government
for a definite period of time is called _______________. *

BUDGET
___________ is concerned with income and expenditure of public authorities and with the adjustment
of one to the other. *

PUBLIC FINANCE

In ___________ fiscal policy, the government collects more money through taxes than it spends and
works best in times of economic booms. *

CONTRACTIONARY

_________________ taxes can be used to finance public services such as affordable housing, health
care, etc. *

PROGRESSIVE

Obligation budgets are for expenditures incurred for the year and to be paid in said year while
_________ budgets are incurred for next year. *

CASH

_____________ is a progressive tax, as people with higher incomes pay more than people with lower
income. *

INCOME TAX

Borrowed funds from the public or from other countries or world organizations due to budget deficit is
called _____________. *

PUBLIC DEBT

Government bureau which collects revenues by imposing tariffs and duties on all items imported into
the Philippines. *

BUREAU OF CUSTOMS

The following are domestic sources of financing except: *

CREDIT FACILITY LOAN

The following are the four areas of Public Finance except:

PUBLIC ADMINISTRATION

The step in the budget process where the Philippine president can sign or veto the General
Appropriation Bill

BUDGET AUTHORIZATION AND LEGISLATION

The step in the budget process where financial report of operations is submitted in the form of trial
balance.

BUDGET ACCOUNTABILITY AND REVIEW

The amount by which the actual gross domestic product (GDP) exceeds potential full employment GDP.

INFLATIONARY GAP

Fiscal policy deals with: *

TAXATION AND EXPENDITURES

The proceeds of this source of financing are used by the government to fund infrastructure, agriculture,
etc.

PROGRAM AND PROJECT LOAN

This provision of the Philippine Constitution states that if, by the end of the fiscal year, the Congress
have failed to pass the General Appropriation Bill (GAB) for the ensuing year, the General Appropriation
Law for the preceding year be deemed re-enacted and shall remain in force until the GAB is passed by
Congress. *

SECTION 25 (7) ARTICLE VI

Illustration: A country recorded the following: Year 1 (has budget deficit and borrowed 15,000), Year 2
(has a budget deficit and borrowed 20,000), Year 3 (has a budget surplus of 10,000 and paid debt for
5,000), Year 4 (has a budget deficit and borrowed 5,000) and Year 5 has a budget deficit and borrowed
25,000). How much is the total deficit in Year 3? (Answer must be in figure. Omit the peso sign and no
decimal points). (2 POINTS) *

Based on the illustration above, how much is the total debt in Year 5. (Omit the peso sign and no
decimal points. Put comma but no spaces). (4 POINTS) *

60,000

A trade theory which focuses on the ability of a country to produce a good more efficiently than another
nation. *

ABSOLUTE ADVANTAGE

Defined as receiving or giving economic values without receiving any economic values in return, such as
economic and military aids and donations. *

SECONDARY INCOME
A trade theory in which countries promotes combination of protectionism policies and restriction and
domestic-industry subsidies. *

NEO-MERCANTILISM

Gained by countries from specialization which resulted to reduction in costs as output increases. *

ECONOMIES OF SCALE

What is being monitored by the balance of payment when it keeps a record of a country's monetary and
economic transactions? *

FLOW OF MONEY

A component of balance of payment which includes a sub-component which can be expressed by the
formula X minus M. *

CURRENT ACCOUNT

One of the determinant of this theory is local firm characteristics which pointed to the relationship of
the forces of competitors and barriers to new market entrants in the Five Forces Model. *

PORTER’S NATIONAL COMPETITIVE ADVANTAGE THEORY

Government reserves with the International Monetary Fund (or IMF) is included in the computation of
what component of the balance of payment? *

FINANCIAL ACCOUNT

Defined as the concept of exchanging goods and services between people or entities in two different
countries. *

INTERNATIONAL TRADE

Limit on the quantity or value of goods imposed by a government to protect domestic industries from
unfair competition from foreign ones. *

IMPORT QUOTAS

Refers to short-term investment in the form of a group of financial assets such as bonds, equity
securities, commercial papers, etc. *

PORTFOLIO INVESTMENT

A strategy or policy which imposed restrictions on imports to protect exports. *

PROTECTIONISM
Refers to the ability to produce goods and services at a lower opportunity cost, not necessarily at a
greater volume or quality. *

COMPARATIVE ADVANTAGE

Person or persons who analyze the sources of imbalances as presented in the Balance of Payment and
become better equipped in determining and implementing adjustment measures, *

POLICY MAKERS

What are being reaped by trading partners each holding comparative advantage in engaging trade for
their specialized goods? *

MUTUAL GAINS

According to this theory, the companies that develop new products for the domestic market export the
products to those countries that are at similar level of development after meeting the needs of the
domestic market *

COUNTRY SIMILARITY THEORY

Defined as a decline in currency value. *

DEVALUATION

A component of international trade engaged in importing goods from one country and exporting it to
another country after adding some value to it. *

ENTREPOT TRADE

A deficit in this BOP component is registered when money is flowing out of the country and the country
is accumulating foreign assets. *

CAPITAL ACCOUNT

This trade theory suggested that a country that has more capital for workers should export capital-
intensive products and imports goods that would require an exhaustive user of its scant resources. *

HECKSCHER-OHLIN THEORY

theory focused on explaining why some nations are more competitive in certain industries. *

PORTER'S NATIONAL COMPETITIVE ADVANTAGE

________________________ refers to the handling of a good as it moves through the typical stages of
its product life. *

PRODUCT LIFE CYCLE MANAGEMENT

Economies of scale, extensive experience in the industry and research and development are examples of
__________________. *

COMPETITIVE ADVANTAGES

COMPETITIVE ADVANTAGE

Income benefits from choosing one alternative over others is called ___________________. *

OPPORTUNITY COST

There are two types of trade theories, one is classical (or country-based) theories and the other one is
______________________ trade theories. *

MODERN

The selling of goods and services produced in the home country to other countries' markets is called
_______________. *

EXPORTS

Any gap between a nation’s dollar value of its exports, or what its producers sell abroad, and a nation’s
dollar worth of imports, or the foreign-made products and services that households and businesses
purchase is referred to as __________________. *

BALANCE OF TRADE

__________________ is one of the three major components of balance of payment which pertains to
international monetary inflows and outflows related to investment. *

FINANCIAL ACCOUNT

Different theories that explain international trade are called ______________ theories. *

INTERNATIONAL TRADE

When a nation is a net lender to the rest of the world, it is interpreted that there is a surplus in the
____________________, a component of the balance of payment. *

CURRENT ACCOUNT

The following transactions were recorded in the books under the Balance of Payment (BOP): (a)
Acquisition of non-financial assets: (17,750), (b) Capital outflows: (23,500), (c) Capital inflows: 18,800, (d)
Disposal of non-financial assets: 21,700, (e) Economic aid: 4,500, (f) Foreign exchange reserves: 8,250,
(g) Investments on equity securities: 11,700, (h) Investments on debt securities: 10,150, (i) Income on
equity capital (net): (19,500), (j) OFWs remittances: 16,500, (k) Other investments on loans/trade credits
(net) : (850), and (l) Trade deficits: (30,000). Compute the Current Account. (5 points) (Answer must be
in figures. Omit the peso sign and no decimal points and spaces but put comma, if applicable). *

-28,500
Using the transactions data on BOP above, compute the Capital Account. (5 points) (Answer must be in
figures. Omit the peso sign and no decimal points and spaces but put comma, if applicable). *

-750

Using the transactions data on BOP above, compute the Financial Account. (5 points) (Answer must be in
figures. Omit the peso sign and no decimal points and spaces but put comma, if applicable). *

29,250

Using the transactions data on BOP above, compute the Balance of Payment. (5 points) (Answer must be
in figures. Omit the peso sign and no decimal points and spaces but put comma, if applicable). *

A student buys 8 pens, 4 reams of bond paper and 3 notebooks annually. The prices of these goods in
years 2018, 2019 and 2020 are as follows: Year 2018 (Pen-P2, Bond paper-P6 and Notebook-P20), Year
2019 (Pen-P4, Bond paper-P12 and Notebook-P40), Year 2020 (Pen-P5, Bond paper-P15 and Notebook-
P50) Question: Calculate the inflation rate between 2018 an 2019. (Round your answer to one decimal
point) (3 points) *

100%

Question: Per figures above, calculate the consumer price index (CPI) in 2020 using 2019 as the base
year. (No decimal point) (3 points) *

125

The following transactions were recorded in the books under the Balance of Payment (BOP): (a)
unilateral transfers: 1,235, (b) imports of goods: 1,065, (c) capital transfer: 335, (d) exports of services:
785, (e) portfolio investment: 1,015, (f) income payments: 615, (g) exports of goods: 855, (h) income
receipts: 220, and (i) import of services: 995. Question: Compute the Balance of Trade. (Omit the peso
sign and NO decimal points and spaces but put comma, if applicable). (3 points) *

-420

Question: Using the figures on BOP above, compute the balance of current account. (Omit the peso sign
and NO decimal points and spaces but put comma, if applicable). (4 points) *

420

A country has a total adult population of 555.4 million and the labor force is 323.5 million (of whom
291.2 million are employed). Question: What is the percentage or rate of people who are not in the
labor force? (Round your answer to one decimal point). (4 points) *

41.8%
Question: Using the figures above, compute the unemployment rate. (Round your answer to one
decimal point). (3 points) *

10%

The government's estimate of its income and expenditures is called ________________. *

NATIONAL BUDGET

________________ is calculated based on the prices in a fixed basket of goods and services that
represents the purchases of the average family of four. *

CONSUMER PRICE INDEX

A legislative tradition allowing opponents of a bill an opportunity to explain at length their position, in
the same manner that a bill’s sponsor delivers a sponsorship speech, is called ______________. *

TURNO EN CONTRA

An international trade theory which focuses on the relative productivity differences is called
______________. *

COMPARATIVE ADVANTAGE THEORY

Adult population is divided into three groups: employed, unemployed and _______________. *

OUT OF THE LABOR FORCE

The four major steps in the budget process are: budget legislation/authorization, budget accountability
and review, budget preparation and ____________. (Presentation of steps not in order) *

BUDGET EXECUTION/IMPLEMENTATION

One of the effect of unemployment is workers losing skills which causes a loss of ________________. *

HUMAN CAPITAL

A standing credit facility provided by the Bangko Sentral ng Pilipinas to help banks meet temporary
liquidity needs by refinancing the loans they extend to their clients is called _________________ facility.
*

REDISCOUNTING

A tax-transfer scheme in public finance which charges higher taxes on the rich and giving subsidies to
the low-income is called _____________________. *

PROGRESSIVE TAXING

The combined deficit of the National Government, the restructuring accounts of the Commercial Bank,
the major non-financial Government Owned and Controlled Corporations, the Local Government Units,
the Government Service Insurance System, the Social Security System, and the BSP is called
_____________________. *

CONSOLIDATED PUBLIC SECTOR DEFICIT

The rate of interest charged to a major bank's most creditworthy customers on short-term working
capital loans. (One answer only) *

BASE RATE

Joblessness occurs when people are without work and actively seeking employment. What is its other
term or name? *

UNEMPLOYMENT

The flow of taxes, sales and purchases of fixed assets to migrants moving in and out of the country is
included in what sub-component of the balance of payment? *

CAPITAL TRANSFERS

A type of monetary policy whose goal is to decrease the level of liquidity or money supply in the
economy. *

CONTRACTIONARY MONETARY POLICY

It is the monetary policies governing body in the Philippines. (No abbreviation) *

BANGKO SENTRAL NG PILIPINAS

A government-owned corporation established in 1977 to generate revenues for the Philippine

government and to regulate and license gambling (particularly in casinos). (No abbreviation) *

PHILIPPINE AMUSEMENT AND GAMING CORPORATION

A type of unemployment usually lasting longer than one year. *

LONG-TERM

When this occurs, the value of currency grows and thus, more goods and services can be purchased at
for the same amount of money. *

DEFLATION

It is lost in a currency when there is a rise in the price level of goods and services over a set period of
time. *

PURCHASING POWER

In the calculation of Consumer Price Index (CPI), in what major category fuel oil is included. *

HOUSING

What is the new term of the General Appropriation Bill after it is signed by the President of the
Philippines and enacted into a law? *

GENERAL APPROPRIATIONS ACT

It states that a one-percent point change in the unemployment rate will bring about output in the
economy to change in the opposite direction by two percent. *

OKUN'S RULE OF THUMB

A policy that protects domestic industries from unfair competition from foreign ones. *

TRADE PROTECTIONISM

Defined as the entire stock of currency and other liquid instruments circulating in a country’s economy
as of a particular time. *

MONEY SUPPLY

In the Philippines, the composition of the CPI basket is determined from the FIES periodically conducted
by the National Statistics Office (NSO) (now Philippine Statistics Authority (PSA). What is the meaning of
the acronym FIES? *

FAMILY INCOME AND EXPENDITURE SURVEY

SUPPLY SIDE SOLUTIONS policies are designed to make the market more flexible in an attempt to
increase long-run economic growth, such as cutting taxes on businesses, reducing regulation, and
increasing education. *

TRUE

LEONTIFF PARADOX THEORY proposed that a country that has more capital for workers should export
capital-intensive products and imports goods that would require an exhaustive user of its scant
resources. (One answer only). *

HECKSCHER-OHLIN THEORY

INFLATION TARGETTING APPROACH happens when inflation rate declines too much leading to a threat
of deflation. *

LIQUIDITY TRAP

NOMINAL OUTPUT refers to the aggregate amount of goods and services produced, adjusted for priced-
level changes. *

REAL OUTPUT

UNDEREMPLOYMENT RATE is the percentage of adults who are in the labor force but who do not have
jobs (over 16 years old). *

UNEMPLOYMENT RATE

Interest rates going up is a consequence of a TRADE SURPLUS. *

TRADE DEFICIT
FOREIGN EXCHANGE SWAPS is an open market operations conducted by the Bangko Sentral ng Pilipinas
where it acts as the seller of government securities with maturities ranging from overnight to one month
to decrease the liquidity of money. *

REVERSE REPURCHASE

In CONTRACTIONARY FISCAL POLICY, the government spends more money than it collects through taxes
and is used during recessions to build a foundation for strong economic growth. *

EXPANSIONARY FISCAL POLICY

Absolute advantage theory which focused on the ability of a country to produce a good more efficiently
than another nation is developed by DAVID RICARDO, an English economist. (Full name) *

ADAM SMITH

FISCAL POLICY refers to the measures employed by governments to stabilize the economy by
manipulating the levels and allocations of taxes and government expenditures. *

TRUE

A student buys 8 pens, 4 reams of bond paper and 3 notebooks annually. The prices of these goods in
years 2018, 2019 and 2020 are as follows: Year 2018 (Pen-P2, Bond paper-P6 and Notebook-P20), Year
2019 (Pen-P4, Bond paper-P12 and Notebook-P40), Year 2020 (Pen-P5, Bond paper-P15 and Notebook-
P50) Question: Calculate the inflation rate between 2018 an 2019. (Round your answer to one decimal
point) (3 points) *

100%

Per figures above, calculate the consumer price index (CPI) in 2020 using 2019 as the base year. (No
decimal point) (3 points) *

125

The following transactions were recorded in the books under the Balance of Payment (BOP): (a)
unilateral transfers: 1,235, (b) imports of goods: 1,065, (c) capital transfer: 335, (d) exports of services:
785, (e) portfolio investment: 1,015, (f) income payments: 615, (g) exports of goods: 855, (h) income
receipts: 220, and (i) import of services: 995. Question: Compute the Balance of Trade. (Omit the peso
sign and NO decimal points and spaces but put comma, if applicable). (3 points) *

-420

Using the figures on BOP above, compute the balance of current account. (Omit the peso sign and NO
decimal points and spaces but put comma, if applicable). (4 points) *

420
A country has a total adult population of 555.4 million and the labor force is 323.5 million (of whom
291.2 million are employed). Question: What is the percentage or rate of people who are not in the
labor force? (Round your answer to one decimal point). (4 points) *

41.8%

Using the figures above, compute the unemployment rate. (Round your answer to one decimal point). (3
points) *

10%

The government's estimate of its income and expenditures is called ________________. *

NATIONAL BUDGET

________________ is calculated based on the prices in a fixed basket of goods and services that
represents the purchases of the average family of four. *

CONSUMER PRICE INDEX

A legislative tradition allowing opponents of a bill an opportunity to explain at length their position, in
the same manner that a bill’s sponsor delivers a sponsorship speech, is called ______________. *

TURNO EN CONTRA

An international trade theory which focuses on the relative productivity differences is called
______________. *

COMPARATIVE ADVANTAGE THEORY

Adult population is divided into three groups: employed, unemployed and _______________. *

OUT OF THE LABOR FORCE

The four major steps in the budget process are: budget legislation/authorization, budget accountability
and review, budget preparation and ____________. (Presentation of steps not in order) *

BUDGET EXECUTION/IMPLEMENTATION

One of the effect of unemployment is workers losing skills which causes a loss of ________________. *

HUMAN CAPITAL

A standing credit facility provided by the Bangko Sentral ng Pilipinas to help banks meet temporary
liquidity needs by refinancing the loans they extend to their clients is called _________________ facility.
*

REDISCOUNTING
A tax-transfer scheme in public finance which charges higher taxes on the rich and giving subsidies to
the low-income is called _____________________. *

PROGRESSIVE TAXING

The combined deficit of the National Government, the restructuring accounts of the Commercial Bank,
the major non-financial Government Owned and Controlled Corporations, the Local Government Units,
the Government Service Insurance System, the Social Security System, and the BSP is called
_____________________. *

CONSOLIDATED PUBLIC SECTOR DEFICIT

The rate of interest charged to a major bank's most creditworthy customers on short-term working
capital loans. (One answer only) *

BASE RATE

Joblessness occurs when people are without work and actively seeking employment. What is its other
term or name? *

UNEMPLOYMENT

The flow of taxes, sales and purchases of fixed assets to migrants moving in and out of the country is
included in what sub-component of the balance of payment? *

CAPITAL TRANSFERS

A type of monetary policy whose goal is to decrease the level of liquidity or money supply in the
economy. *

CONTRACTIONARY MONETARY POLICY

It is the monetary policies governing body in the Philippines. (No abbreviation) *

BANGKO SENTRAL NG PILIPINAS

A government-owned corporation established in 1977 to generate revenues for the Philippine

government and to regulate and license gambling (particularly in casinos). (No abbreviation) *

PHILIPPINE AMUSEMENT AND GAMING CORPORATION

A type of unemployment usually lasting longer than one year. *

LONG-TERM

When this occurs, the value of currency grows and thus, more goods and services can be purchased at
for the same amount of money. *

DEFLATION
It is lost in a currency when there is a rise in the price level of goods and services over a set period of
time. *

PURCHASING POWER

In the calculation of Consumer Price Index (CPI), in what major category fuel oil is included. *

HOUSING

What is the new term of the General Appropriation Bill after it is signed by the President of the
Philippines and enacted into a law? *

GENERAL APPROPRIATIONS ACT

It states that a one-percent point change in the unemployment rate will bring about output in the
economy to change in the opposite direction by two percent. *

OKUN'S RULE OF THUMB

A policy that protects domestic industries from unfair competition from foreign ones. *

TRADE PROTECTIONISM

Defined as the entire stock of currency and other liquid instruments circulating in a country’s economy
as of a particular time. *

MONEY SUPPLY

In the Philippines, the composition of the CPI basket is determined from the FIES periodically conducted
by the National Statistics Office (NSO) (now Philippine Statistics Authority (PSA). What is the meaning of
the acronym FIES? *

FAMILY INCOME AND EXPENDITURE SURVEY

SUPPLY SIDE SOLUTIONS policies are designed to make the market more flexible in an attempt to
increase long-run economic growth, such as cutting taxes on businesses, reducing regulation, and
increasing education. *

TRUE

LEONTIFF PARADOX THEORY proposed that a country that has more capital for workers should export
capital-intensive products and imports goods that would require an exhaustive user of its scant
resources. (One answer only). *

HECKSCHER-OHLIN THEORY

INFLATION TARGETTING APPROACH happens when inflation rate declines too much leading to a threat
of deflation. *

LIQUIDITY TRAP
NOMINAL OUTPUT refers to the aggregate amount of goods and services produced, adjusted for priced-
level changes. *

REAL OUTPUT

UNDEREMPLOYMENT RATE is the percentage of adults who are in the labor force but who do not have
jobs (over 16 years old). *

UNEMPLOYMENT RATE

Interest rates going up is a consequence of a TRADE SURPLUS. *

TRADE DEFICIT

FOREIGN EXCHANGE SWAPS is an open market operations conducted by the Bangko Sentral ng Pilipinas
where it acts as the seller of government securities with maturities ranging from overnight to one month
to decrease the liquidity of money. *

REVERSE REPURCHASE

In CONTRACTIONARY FISCAL POLICY, the government spends more money than it collects through taxes
and is used during recessions to build a foundation for strong economic growth. *

EXPANSIONARY FISCAL POLICY

Absolute advantage theory which focused on the ability of a country to produce a good more efficiently
than another nation is developed by DAVID RICARDO, an English economist. (Full name) *

ADAM SMITH

FISCAL POLICY refers to the measures employed by governments to stabilize the economy by
manipulating the levels and allocations of taxes and government expenditures. *

TRUE