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ECC1100 - Principles of macroeconomics - S1 2025

ECC1100 - Principles of macroeconomics - S1 2025

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Which of the following is NOT an example of a financial account transaction?

An Australian purchases an apartment in Paris.

An Australian buys shares in an Indonesian company.

A French person buys an apartment in Australia.

A Singaporean person buys Australian shares.

An Australian company pays dividends to foreign shareholders.

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Which of the following statements about the current account (in the balance of payments) is TRUE? If a country has a current account surplus,

it will have a weaker currency.

it will have a stronger currency.

it will have a high GDP.

it means that its imports are greater than the exports.

it will have a financial account deficit.

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Which of the following statements about the marginal propensity to consume (mpc) is TRUE?

The marginal propensity to consume (mpc) can be greater than 1.

The marginal propensity to consume (mpc) is the total amount of money available for consumption.

If real interest rates increase, marginal propensity to consume (mpc) decreases.

Richer households have lower marginal propensity to consume (mpc).

A change in the marginal propensity to consume (mpc) leads to a shift in the consumption function.

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Potential output

determines the price level in the economy

is determined by technology, labour, human capital and physical capital.

responds to business cycles.

is determined by the intersection of the aggregate demand (AD) and the aggregate supply (AS).

is not affected by productivity

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Which of the following will lead to a deprecation of the Australian dollar?

An increase in the price of foreign goods.

An increase in tourists coming to Australia.

An increase in Australians investing overseas.

An increase in foreigners investing in Australia.

A decrease in the price of Australian goods.

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Which of the following statements about GDP (Gross Domestic Product) is incorrect?

Nominal GDP can be lower than real GDP.

Cooking for your family is not counted in GDP as there is no production of goods or services.

A higher priced car will contribute more to the GDP than a lower priced car.

Imports are subtracted because they a part of domestic production.

Higher GDP means higher income for a particular individual in the economy.

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Which of the following would reduce the natural rate of unemployment?

an increase in the education and skills in the economy.

an increase in government expenditure.

a decrease in interest rates.

An increase in economic activity.

An increase in participation rate.

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Based on consumption smoothing over the lifecycle,

households save because of precautionary savings motives.

an increase in future income may lead to lower savings in the current time period.

household consumption is fixed.

households always save a fixed portion of their income.

household save in order to leave an inheritance.

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Which of the following are the shoe-leather costs of inflation? Due to high inflation...

businesses spend resources to update their prices.

businesses spend resources to track the changes in prices.

lenders receive lower real returns.

people make more frequent trips to the bank or ATM to withdraw smaller amounts of money.

governments collect more taxes as nominal incomes increase.

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Which of the following factors can cause a shift in the short-run aggregate supply curve?

Changes in the input prices.

Changes in government spending.

Changes in consumer preferences.

Changes in the exports.

Changes in the price level.

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