Economics 100.1: Introduction to Macroeconomic Theory and Policy
Exercise Set No. 1
June 25, 2013
E. de Dios Abesamis / Arellano/ Libre
I. Encircle the letter corresponding to the best answer.1.
Which of the following statements is UNTRUE when an economy is on its production possibilities curve?a.
Resources are being fully employed. b.
Society is operating with productive efficiency.c.
The production of any good cannot be increased without reducing the production of some others.d.
Consumers will have all that they want of all goods and services.e.
A strike by workers will move the economy beneath the PPC.2.
What is being measured on the axes of a PPC graph?a.
quantities of productive inputs or resources b.
quantities of final goods and servicesc.
values of productive inputs or resourcesd.
values of produced goods and servicese.
levels of prices of commodities3.
Which of the following will
shift the production possibilities curve outward?a.
An improvement in levels of education among the labor force. b.
An increase in the quantity of the labor force.c.
An improvement in production technology.d.
The discovery of a huge source of oil within the country.e.
A reduction in unemployment.4.
The main difference between nominal and real GDP is thata.
real GDP is adjusted for price changes while nominal GDP is not. b.
nominal GDP is adjusted for price changes while real GDP is not.c.
nominal GDP is a better measure for comparing output across several years.d.
real GDP increases more compared to nominal GDP during periods of high inflation.e.
nominal GDP is more stable compared to real GDP.5.
Real GDP of the Philippines grew by 6.6% for the year 2012. If the population grew 1.87% over the same period, then per capita real GDP grew roughly by ____ for 2012.a.
0.28 % b. 3.53 % c. 4.73 % d. 6.6 % e. 8.47 %6.
The total working-age population in the Philippines for the year 2010 was 61.53 million, of which 63.7% werein the labor force. In 2011, total working age population grew to 62.68 million while labor force participationrate grew to 64.2%. If the number of unemployed people was 2.90 million for both 2011 and 2012, thena.
the unemployment rate was higher in 2011 than in 2012. b.
the unemployment rate was higher in 2012 than in 2011.c.
the unemployment rate was the same for both years.d.
the number of people employed in 2011 was higher than in 2012.e.
there is not enough information to determine the unemployment rate.Refer to the following information for items 7-8:Various parts of the typical unit of the U.S. smart phone Orange Nebula X5 are produced in several countries.The hard disk and display screen cost $95 and are produced in Japan. Other components are produced in SouthKorea at a cost of $30. The parts are then assembled in China at a cost of $8. The assembled phone is transported bythird-party American freight companies at the cost of $2 per unit. Finally it is sold directly by Orange, Inc. toconsumers at the price of $399.