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De La Salle College of Saint Benilde

School of Multidisciplinary Studies

Social Sciences Department
Final Examination
I. Multiple Choice: : Write letter of the correct answer.
1. A measure of the value of all the final goods and services newly produced in a country
during some period of time
a. GNI
b. PPP
c. GDP
2. Flow-of-product approach wherein households consume a variety of goods & services
a. Inner Flow
b. Circular Flow
c. Cash Flow
3. May cause slow down the movement of income
a. Leakages
b. Injections
c. Inflows
4. These are necessary to allow the flow of income back to the economic flow
a. Injections
b. Outflows
c. Both A and B
5. In this approach, all spending on final goods and services shall be totaled
a. Income
b. Expenditure
c. Both A and B
6. The sum of labor income and capital income, while it excludes the income to be
allocated for indirect business taxes, depreciation, and foreigners in the domestic
a. Personal Income b. National Income c. Net Income
7. A measure of the income received directly by individuals
a. Wages
b. Salaries
c. Personal Income
8. By adding up the production of each firm or industry in the economy, GDP can be
a. Product Approach b. Income Approach c. Expenditure Approach
9. Also known as GDP price index, it is the price of all goods and services produced in the
a. Nominal GDP
b. Real GDP
c. GDP Deflator
10. When GDP is measured using the process from a base year, instead of the current
years prices, it is referred to as
a. GDP Deflator
b. Nominal GDP
c. Real GDP
11. When GDP is measured for a specific year using the prevailing market prices of that
a. Real GDP
b. GDP Deflator
c. Nominal GDP
12. A place where buyers and sellers meet and exchange goods and services
a. Virtual Market
b. Market Structure c. Market
13. Market that has few sellers who are aware of the action of the others
a. Oligopoly
b. Monopoly
c. Monopolistic Competition
14. A market structure with a single producer or seller of goods and services
a. Monopoly
b. Monopsony
c. Monopolistic Competition
15. Market situation where there is only one buyer of goods and services
a. Oligopoly
b. Monopoly
c. Monopsony
16. Market situation where there are a small buyer of goods and services in the market
a. Oligopsony
b. Oligopoly
c. Pure Competition
17. A classification system for grouping firms according to the type of competition they face
in the market
a. Street Market
b. Virtual Market
c. Market Structure

18. A formal agreement among oligopolists to set-up monopoly price, allocate output, and
share profit among members
a. Cartel
b. Collusion
c. Oligopsony
19. A formal or informal agreement among the oligopolist to adopt policies that will restrict or
reduce the level of competition among themselves
a. Oligopsony
b. Cartel
c. Collusion
20. Value characteristics or a quality of goods varies; a classic example of this type is the
automobile industry because of the numerous characteristics of cars
a. Pure Oligopoly
b. Differentiated Oligopoly
c. Regulated Oligopoly
21. Few sellers that produce identical products; common in a market situation where the
products are sold are fairly homogenous; examples of the products they sell include
cement, sugar, and other raw materials
a. Natural Oligopoly b. Pure Oligopoly
c. Differentiated Oligopoly
22. When the conditions important for perfect competitions are not satisfied; individual firm
can control the pricing system
a. Pure Market
b. Imperfect Market c. Perfect market
23. When market situation has a very large number of buyers and sellers identical or
homogenous product; no particular firm can influence the market price
a. Perfect Market
b. Pure Competition c. Imperfect Market
24. A type of market where there is large number of sellers that produce similar products,
but the products are perceived by buyers as different
a. Pure Competition b. Monopoly
c. Monopolistic Competition
25. Exists where a firm has a monopoly in a specific geographic location
a. Local Monopoly b. Natural Monopoly c. Coercive Monopoly
26. A market situation where a single firm can supply the entire market due to the
fundamental cost structure of the industry; only big economies or producers will be able
to stay in the business when the quantity increases as cost decline
a. Natural Monopoly b. Differentiated Monopoly c. Local Monopoly
27. Where pricing and production are controlled by the government
a. Coercive Monopoly
b. Natural Monopoly c. Regulated Monopoly
28. Do not require actual money and should not be included in measuring GDP
a. Multiple Counting b. Non-Production Transactions
c. Financial Transactions
29. Gift cheques are examples of what financial transactions?
a. Public Transfer Paymentsb. Private Transfer Payments c. Security Transactions
30. Stock market activities are examples of what financial transactions?
a. Security Transactions
b. Public Transfer Payments c. Private Transfer Payments
31. Tax on value, added by every seller to his purchases of goods and services
a. Income Tax
b. Community Tax
c. Value -Added Tax
32. What was the original VAT when it was introduced on January 1, 1988?
a. 12%
b. 11%
c. 10%
33. How much is the Personal Exemption of the Head of the Family?
a. Php 25,000.00
b. Php 35,000.00
c. Php 50,000.00
34. How much is the Additional Exemption of every one child dependent 2I years old below?
a. Php 15,000.00
b. Php 25,000.00
c. Php 35,000.00
35. How much is the basic community tax / Class A?
a. Php 5.00
b. Php 50.00
c. Php 15.00

II. Classify the following advantages of the different business organizations: Write the
a. Sole Proprietorship b. Partnership

c. Corporation

d. Multinationals

1. Help spread new technology worldwide

2. Non-payment of business taxes
3. Easy to transfer ownership
4. Generate new jobs in areas where jobs are needed
5. Easy to raise financial capital
6. Can hire the best corporate managers to run the firm
7. Psychologically fulfilling
8. Exclusivity of profits
9. Produce tax revenues for the host country
10. Provides limited liability for its owners
11. No special taxes assessment
12. Attracts financial capital more easily
13. Slightly larger in size, which makes efficiency easier to reach
14. Unlimited life
15. Easier to attract top talent into their organizations
III. Compute the Nominal GDP, Real GDP and GDP Deflator:



*Base Year




Real GDP




IV. Essay: Answer at the back.
1. Is the power of taxation a power to destroy? (5pts)
2. What do you mean by a limited partner in a partnership? (5pts)