ECN242 TEST
This is the main continuous assessment for the course ECN242. There are 30 questions to be answered in 15
minutes. The quiz submission will stop by 3.25 pm.
Real GDP is measured as
A. (current GDP)/(price deflator)
B. (Nominal GDP)/(price deflator)
C. (price deflator)/(current GDP)
D. (Nominal GDP)/(base year GDP)
The macroeconomic objective of full employment means
A. All available resources are employed in production process
B. All available resources are efficiently used in production process
C. All available resources are used at maximum potential level
D. All of the above
GDP at constant prices is also referred to as
A. Normal GDP
B. Real GDP
C. Nominal GDP
D. Current GDP
National income as summation of all incomes include all except
A. Rents
B. Interests
C. Dividends
D. Transfers
In the computation of national income from Net National Product (NNP),
A. indirect business taxes and subsidies must be subtracted
B. indirect business taxes must be added and subsidies subtracted
C. indirect business taxes must be subtracted and subsidies added
D. Only indirect business taxes must be added
According to Keynes, Average Propensity to Consume (APC) rises as
A. income rises
B. income falls
C. savings rate rises
D. None of the above
The following are likely to happen when savings is lesser than investment in an economy except
A. Consumptions will be greater than savings
B. National Production will increase
C. National income will increase
D. Consumption will be lesser than savings
Which of the following expressions is not correct?
A. Y= C + S
B. C = Y-S
C. S = Y+ C
D. Y–C=S
Given Y = C + I + G + (X – M), this is an example of
A. A 3-sector aggregate demand function for an open economy
B. A 3-sector aggregate demand function for a closed economy
C. A 4-sector aggregate demand function for an open economy
D. A 4-sector aggregate demand function for a closed economy
Which of the following is the right leakage-injection expression?
A. I+S=G+T
B. S+I+G=T+X+M
C. I+G+X=S+T+M
D. I+G+M=S+T+X
What type of unemployment is directly linked to the business cycle?
A. Frictional Unemployment
B. Structural Unemployment
C. Cyclical Unemployment
D. Seasonal Unemployment
Which law relates to the relationship between output and unemployment?
A. Okun’s Law
B. Moore's Law
C. Gresham’s Law
D. Say’s Law
The Phillips Curve illustrates the relationship between which two economic variables?
A. Inflation and GDP
B. Unemployment and Inflation
C. Employment and GDP
D. Wages and Unemployment
What does the Consumer Price Index (CPI) measure?
A. The average price of goods produced domestically
B. The average price paid by urban consumers for a market basket of consumer goods and
services
C. The average price received by producers for intermediate goods
D. The overall level of prices in the economy
Which type of unemployment arises from workers searching for new jobs or transitioning from one job to
another?
A. Cyclical Unemployment
B. Structural Unemployment
C. Frictional Unemployment
D. Seasonal Unemployment
Efficiency wages are defined as:
A. Wages set by the government to ensure fair pay
B. Wages above the equilibrium level to increase worker productivity
C. Wages determined by market equilibrium
D. Minimum wages mandated by law
Which of the following is NOT a factor that can increase structural unemployment?
A. Oil price shocks
B. Minimum wages
C. Job retraining programs
D. Powerful unions
What does the term "hidden unemployment" refer to?
A. Workers who are overqualified for their jobs
B. Part-time workers seeking full-time positions
C. Discouraged workers who have given up looking for a job
D. Unemployed individuals actively seeking work
Which of the following functions of money is mostly affected during inflation?
A. medium of exchange
B. unit of account
C. store of value
D. standard of deferred payment.
One of the probable effects of an increased minimum wage in Nigeria is
A. To create voluntary unemployment
B. To reduce the wages rate
C. To increase the level of employment
D. To the increase the demand for labour
The table below shows the age distribution of country A in 1983. Using the data in the table, calculate the
percentage of working population in 1983.
A. 48%
B. 52%
C. 57%
D. 70%
An efficient weapon used resolving dispute between employers and employees is
A. co-operation
B. collective bargaining
C. display of placards
D. legal action
Demand pull inflation can be aptly described as
A. inflation induced by rising cost of production
B. reduction in government expenditure
C. persistent rise in prices due to increase in expenditure
D. massive importation of goods from a country with hyperinflation.
According to the Philip’s Curve,
A. Output growth has a negative relationship with unemployment
B. Government expenditure has an inverse relationship with interest rate
C. Changes in inflation has an inverse relationship with unemployment rate
D. None of the above
Which of the following does not constitute the natural rate of unemployment?
A. Structural unemployment
B. Frictional Unemployment
C. Cyclical unemployment
D. None of the above
The Life Cycle Hypothesis of Income was propounded by
A. John Maynard Keynes
B. Milton Friedman
C. Franco Modigliani
D. Adam Smith
A simultaneous occurrence of high inflation and high unemployment in a stagnant economy is known as
A. Hyper-inflation
B. Galloping inflation
C. Inflation
D. Stagflation
The Expenditure Approach to computing GDP involves the following categories, EXCEPT
A. Personal consumption expenditures
B. Gross private domestic investment
C. Net exports
D. Total money supply.
Which of the following is the main outcome of a trade union’s interference with the wage rate?
A. lowered but more employment opportunities are created.
B. lowered but employment levels remain unchanged
C. increased and employment levels are unchanged
D. increased but employment levels are reduced.
Frictional unemployment can be reduced by
A. encouraging the use of retraining schemes
B. removing barriers to labor mobility
C. restricting the introduction of new technology
D. lowering the levels of wages paid to young people.
