Question

1. Country X exports 10 million tonnes of wheat to Country Y. Which of the following will happen in this case?

A) Country Y's GDP will increase. B) Country X's GDP will increase. C) Country X's GNP will decrease. D) Country Y's GNP will increase

2. The expenditure-based method of national accounting ______.

A) only tracks the purchase of goods and services by the government

B) tracks the purchases of all goods by households, firms and the government

C) does not track the purchase of investment goods by firms and households

D) only tracks the purchases of goods and services by firms

3) Several houses built in a country during a certain year got damaged due to an earthquake. Which of the following is likely to happen due to this damage?

A) the country's GDP will remain unchanged

B) the country's GDP will decrease

C) the trade surplus of the country will increase

D) the trade deficit of the country will increase

4) Which of the following is a macroeconomic concept?

A) the income elasticity of demand for a good

B) the average revenue earned by a firm

C) the per capita income of a country

D) the elasticity of supply of a good

Answer 1

Ans:

1) Option B

Country X's GDP will increase

Explanation

GDP is the market value of final goods and services produced by a country during a specific period of time. Exports made by a country are part of GDP.

2) Option B

tracks the purchases of all goods by households, firms and the government.

Explanation

The three methods of calculating national income are value added method, income method and expenditure method. The expenditure-based method of national income accounting tracks the purchases of all goods by households, firms and the government.

3) Option A

the country's GDP will remain unchanged

Explanation

GDP is the market value of final goods and services produced by a country during a specific period of time.

4) Option C

the per capita income of a country.

Explanation

Macroeconomics is the branch of economics that studies the economy as a whole. Macroeconomic factors include gross domestic product, national income, per capita income, inflation and unemployment.