RB CAGMAT REVIEW Macroeconomics Reviewer.yet Sample Questions

5/24/2018 RB CAGMAT REVIEW Macroeconomics Reviewer.yet Sample Questions

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Licensure Examination forgriculturists

Topic: Macroeconomics

Lecturer: Adel S. Laureto, Ph.D.


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1. In the Philippines, national income accounting is done and

maintained by what office/agency:

a. Department of Budget and Management

b. Department of Trade & Industryc. Department of Finance

d. National Economic Development Authority (NEDA)

2. GNP represents the:a. market value of all intermediate goods and services

produced by the economy within the year

b. market value of all final goods and services produced by the

economy within the year

c. market value of all final and intermediate goods and services

produced by the economy within the year

d. all of the above


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3. GNP & GDP are closely related measures of aggregateoutput or income, but GDP does not take intoaccount:

a. exports and importsb. remittances from overseas workers

c. government spending

d. business investments

4. An approach to GNP (or GDP) measurements which sumsup all final sales to end-users is:

a. Expenditure approachb. Income approach

c. Industrial Origin approach

d. Value-added approach


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5. GNP/GDP excludes non-productive transactions such as

firms:

a. second hand sales

b. purely financial transactionsc. both a and b

d. neither a nor b

6. Economists prefer to use real GNP than current or nominal

GNP as a measure of aggregate output because

a. Current GNP always understates actual output

changesb. Real GNP adjusts current GNP for inflation

c. Real GNP adjusts for the unequal distribution of

income

d. All of the above


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7. Real GDP is greater than nominal GDP if:

a. imports exceeds exports

b. exports exceeds imports

c. prices are falling

d. prices are rising

8. Which of the following is not a component of GDP?

a. net exports

b. investments

c. sales of intermediate goods

d. government spending


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9. When net export is positive the amount is:

a. deducted from the GNP

b. Added to the GNP

c. divided by the GNP deflator

d. multiplied by 100%

10. The difference between GNP and NNP is accounted forby:

a. indirect taxes

b. personal taxesc. depreciation

d. government transfers


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11. Suppose the Nominal GDP in 2009 was 500 billion pesos

and the CPI was 125, then the real GDP must be:

a. P 125 billion

b. P 400 billion

c. P 300 billion

d. P 500 billion

12. Based in # 11, if the population in 2009 were 80 million

people, then the real per capita GDP must be:

a. P 3,000b. P 4,000

c. P 5,000

d. P 6,000


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13. Suppose that the consumer price index for 2007, 2008

and 2009 are 100, 110, and 125, respectively. This

implies that the general price level in 2009 is higher

than that of 2007 by:a. 25 pesos c. 25 percent

b. 15 percent d. 10 pesos

14. Still continuing from question #11, if nominal GNP in

2005 placed at P 300 billion, we can say that the

growth rate in nominal GNP between 2005 and 2009

is:a. 60% b. 63% c. 67% d. 70%


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15. Keynesfundamental law of consumption states that:

a. the change in income is greater than the changes inconsumption

b. the changes in consumption is greater than thechange in income

c. people stop consuming when they become affluent

d. none of the above

16. The consumption function/equation C = 20 + .90 Ydpredicts that consumption is:

a. 90 when disposable income (Yd) is 100b. 100 when Ydis 90

c. 110 when Ydis 100

d. 180 when Ydis 200


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17. The marginal propensity to consume (mpc) is the ratio

of:

a. Extra consumption to extra income

b. Total consumption to total income

c. Extra consumption to total income

d. Total consumption to extra income

18. If the marginal propensity to consume (mpc) is 0.75 the

marginal propensity to save (mps) is:

a. 15 b. 20 c. 25 d. 75


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19. If the mpc is 0.75, the multiplier has a value of:

a. 5 c. 3

b. 4 d. 2

20. It measures the change in the equivalent level of income

due to a changes in the aggregate expenditures

a. marginal propensity to consume

b. multiplier

c. balance budget multiplier

d. marginal propensity to save


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21. Based from #16, if C = 20 + .90Yd, the equivalent saving

function is:

a. S = -20 + .10Yd c. S = 20 - .9Yd

b. S = 0 + .Yd d. S = .9 + 20 Yd

22. The exact relationship between the mpc and the mps is:

a. mpc = mps c. mpc + mps = 0

b. mpc + mps = 1 d. mpcmps = 1


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23. The larger the mps:

a. The smaller the multiplier

b. The larger the multiplier

c. The larger the mpc

d. The greater the investment

24. Disposable income can either be spent on which twoitems?

a. savings and consumption

b. consumption and investmentc. savings and investment

d. none of the above


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25. Equilibrium in the economy occurs in a two-sector model

when:

a. savings equals investment

b. consumption plus investment equals planned

investment

c. investment plus government spending equals savingsplus taxes

d. all of the above


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Given the following equations, answer items 26-29:

S = -25 + 0.4Y ; G = 20 ; I = 15 ; T = 0

26. The equilibrium level of income (Y) is:

a. 100 b. 120 c. 150 d. 200

27. The equilibrium level of consumption spending is:

a. 100 b. 115 c. 125 d. 90

28. The equilibrium level of saving is:

a. 25 b. 35 c. 55 d. 60

29. The value of the multiplier is:

a. 1.6 b. 2.0 c. 2.5 d. 3.0


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30. Monetary policy refers to government policies related

to:

a. wages and prices

b. Money supply, credit and interest rates

c. Government expenditures and taxation

d. Investments

31. Fiscal policies are government policies related to:

a. wages and prices

b. Money supply, credit and interest ratesc. Government expenditures and taxation

d. Investment


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32. Which of the following is consistent with a tight

monetary policy?

a. Low interest rates

b. High reserve requirement

c. increase money supply

d. Subsidizing interest rates to borrowers

33. Money supply will normally increase when:

a. The BSP increases the reserve requirement

b. The government sells bond to the publicc. The BSP lowers the rediscount rate

d. all of the above


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34. When lending interest rates are low, the primary effect is

to:

a. encourage investment

b. discourage investment

c. encourage investment

d. discourage consumption

35. If the national governments revenues exceed its

spending, there is:

a. budget deficit c. balanced budgetb. budget surplus d. none


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36. The bulk of government spending is a accounted for by

a. maintenance and operating expenses

b. debt service

c. personal services

d. capital outlay

37. Money in a modern economy performs such function (s)as:

a. medium of exchange

b. store of valuec. standard of deferred payment

d. all of the above

i l l i


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38. Nominal money supply is:

a. the peso value of the nations money supply

b. flow of receipts per unit of time

c. checking accounts at commercial banks

d. peso value of the money supply over the price level

39. Keynes recognized that there are three distinct motives forholding money. How would you classify money balances held

to meet unforeseen contingencies because of uncertainty

about the receipt and expenditure of future income.

a. speculative demand for money

b. transaction demand for money

c. precautionary demand for money

d. real demand for money


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40. A household purchased dollars this time that the

Philippine peso is strong given an exchange rate of

Php47:$1, with the anticipation to sell said dollarswhen its value appreciates. What demand for money

is exhibited by this situation?

a. speculative demand for money

b. transaction demand for money

c. precautionary demand for money

d. real demand for money

41 B k i h i f h


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41. By open market operations we mean the actions of the

government to:

a. Increase or decrease government spending

b. Increase or decrease taxes

c. Buy and sell government securities or bonds

d. Buy and sell investment goods and services

42. The rate at which the BSP charges commercial banks is

called:

a. Interbank rateb. Rediscount rate

c. Overnight lending rate

d. Prime rate

43 Th h ld b h b k d b h l l


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43. The reserve held by the bank over and above the legal

reserve

a. Required reserve

b. Excess reserve

c. interbank rates

d. None of the above

44. A devaluation refers to:

a. An increase in the value of foreign currency in terms

of domestic currency

b. A decrease in the value of foreign currency in terms

of domestic currency

c. An increase in the value of domestic currency in terms of

foreign currency


45 Th t t t l di id d i t


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45. The governments total revenues are divided into:

a. Tax and non-tax revenues

b. Income tax and tax on property

c. VAT and income tax

d. Prime rate

46. This is a phase in the business cycle when economicprosperity is experienced

a. recessional phase

b. peak phasec. expansion phase

d. trough phase

47 Whi h f th f ll i i tl i t d ith


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47. Which of the following is mostly associated with

unemployment due to business recessions?

a. frictional unemployment

b. cyclical unemployment

c. seasonal unemployment

d. structural unemployment

48. This type of unemployment happens as new workers

enter the labor force and as workers change jobs for

one reason or another

a. natural unemployment

b. frictional unemployment

c. structural unemployment

d. cyclical unemployment

49 I fl ti


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49. Inflation causes:

a. a loss to fixed income earners

b. a decline in the purchasing power of money

c. a loss to lenders of money and a benefit to borrowers

of money

d. all of these are possible

50. What type of unemployment is caused by a deficiency of

aggregate or total demand?

a. natural unemploymentb. frictional unemployment

c. structural unemployment

d. cyclical unemployment

51 C t h i fl ti b d b


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51. Cost-push inflation maybe caused by:

a. Lower business spending

b. Higher budget deficits

c. Higher labor cost

d. Lower government spending

52. Demand-pull inflation may result from:

a. Higher wage rates

b. Higher taxes

c. Lower budget deficitsd. Lower taxes

53 Inflation brought about by considerable market power is


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53. Inflation brought about by considerable market power is

related to as:

a. demand-pull inflation

b. cost-push inflation

c. structural inflation

d. all of the above

54.Crude oil is one of the primary inputs to production for it runsfactory machines and equipment. An increase in its price in the

world market will result to what type of inflation?

a. Demand pull or Excess demand inflation

b. Cost push inflation

c. Demand shift inflation


55 Which of the following groups is not penalized by


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55. Which of the following groups is not penalized by

inflation?

a. savers

b. debtors

c. creditors

d. fixed money income groups

56. The most commonly used measure of change in the

general price level is

a. cost of livingb. consumer price index (CPI)

c. price increase

d. supply of money

57 Stagflation is a situation that occurs when:


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57. Stagflation is a situation that occurs when:

a. the unemployment rate is high and the inflation rate

is low

b. the unemployment rate is low and the inflation rateis high

c. both rates are high

d. both rates are low

58. A term created to describe a situation of simultaneous

economic stagnation, high unemployment and

inflation is:

a. deflation c. depression

b. inflation d. stagflation

59 The current law which addresses food security and


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59. The current law which addresses food security and

competitiveness of the agricultural sector is known as

a. Agriculture and Fisheries Modernization Act

b. Agriculture and Forestry Modernization Act

c. Agriculture Fisheries and Mining Act

d. Agriculture Farm Management Act

61. An act mainstreaming climate change into government

policy formulations.

a. RA 9168 c. RA 9003b. RA 9147 d. RA 9729

62 An act to provide protection to new plant varieties


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62. An act to provide protection to new plant varieties

establishing a National Plant Variety Protection Board.

a. RA 9168 b. RA 9147 c. RA 9003 d. RA 9729

63. An act providing for an ecological solid waste

management program.

a. RA 9168 b. RA 9147 c. RA 9003 d. RA 9729

64. An act to promote animal welfare in the Philippines,

otherwise known as the Animal Welfare Act of 1998.

a. RA 9168 b. RA 9164 c. RA 9003 d. RA 8485

65 An act prescribing urgent related measures to modernize


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65. An act prescribing urgent related measures to modernize

the Agriculture and Fisheries sectors of the

Philippines.

a. RA 1937 b. RA 8435 c. RA 9147 d. RA 9003

66. An act to strengthen Agriculture and Fisheries

Modernization in the Philippine by extending the

effectivity of tax incentives and its mandated funding

support amending for this purpose sections 109 and

112 of RA 8435 is:

a. RA 9281 b. RA 9147 c. RA 9003 d. RA 1937

67 The law which promotes high value crops is given by


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67. The law which promotes high value crops is given by

a. RA 3438 b. RA 7900 c. RA 6455 d. RA 6430

68. When a government wishes to create excess demand forforeign exchange, it basically adopts which of the

following:

a. Devaluation c. Depreciationb. Overvaluation d. Deterioration


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END Good Luck

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RB CAGMAT REVIEW Macroeconomics Reviewer.yet Sample Questions