EC101 Sample MST paper 2023, Exams of Economics

Download EC101 Sample MST paper 2023 and more Exams Economics in PDF only on Docsity! EC101: Principles of Macroeconomics School of Accounting Finance and Economics Discipline of Economics Mid Semester Test (Sample) Semester 2 2022 Face to Face Duration of Exam: 2 hours + 10 minutes Reading Time: 10 minutes Writing Time: 2 hours INSTRUCTIONS: 1. There are 3 sections in this paper and a total of 21 questions. Section Nature of Questions No of Questions Total Marks Choice Section A Multiple Choices 15 15 Compulsory Section B Short Answers 3 10 Compulsory Section C Calculations and Graphical Analysis 3 35 Compulsory 2. Answer all questions in the answer booklet provided. 3. Use of silent and non-programmable calculator is allowed. 4. This paper is marked out of 60 and contributes 20% towards the overall mark for the course. 5. There are 8 pages to the examination paper, including the cover page. Page 2 of 8 Section A: Multiple Choice Questions. Answer All Questions. (15 marks) Component Amount (billions of dollars) Personal consumption expenditure 3,720 Government expenditure 430 Gross investment 610 Net investment 520 Exports 650 Imports 720 1. Using the information in the table above, calculate gross domestic product. A. $5,130 billion B. $4,690 billion C. $4,760 billion D. $5,320 billion 2. Real GDP measures the A. general upward drift in prices. B. total profits earned by all businesses, valued using prices from a single year. C. value of total production linked to the prices of a single year. D. changes in the prices of output measured in dollars. 3. Consumption expenditure is the payment by households for consumption of A. services but not goods. B. goods but not services. C. goods and services. D. goods and exports. 4. Let C represent consumption expenditure, S saving, I gross private domestic investment, G government expenditure on goods and services, and X - M net exports of goods and services. Then GDP equals A. C + S + G + X - M. B. C + I + G + X - M. C. C + S + G - X - M. D. C + I + G - X - M. Page 5 of 8 Figure A:2 12. The curve labelled A in the above Figure A:2 is a A. long-run aggregate demand curve. B. long-run aggregate supply curve. C. short-run aggregate supply curve. D. short-run aggregate demand curve. 13. The opportunity cost of any action is A. the highest-valued alternative given up. B. the dollars the action cost. C. the benefit from the action minus the cost of the action. D. all the possible alternatives given up. 14. When autonomous expenditure decreases, ________. A. the AE curve becomes less steep B. the AE curve shifts downward C. the AE curve shifts upward D. there is a movement down along the AE curve Page 6 of 8 15. You have the choice of going on vacation to the Gold Coast for one week, staying at work for the week, or spending the week doing fix-up projects around your house. If you decide to go to the Gold Coast, the opportunity cost of the trip is A. working or doing fix-up projects, depending on which you would have done otherwise. B. nothing because you will enjoy the trip to the Gold Coast. C. working and doing fix-up projects. D. working, because you would be giving up dollars. Page 7 of 8 Section B: Short Answers. Answer All Questions (10 marks) 1. What is the multiplier? What does it determine? Why does it matter? (3 marks) 2. Does economic growth result from increases in aggregate demand, short-run aggregate supply or long-run aggregate supply? (3 marks) 3. Distinguish between real GDP and potential GDP and describe how each grows over time. (3 marks)