Chose the correct answer 1) Gross domestic product (GDP) measures the A) number of final goods and services produced in the economy in a given time period. B) number of final goods and services sold in the economy in a given time period. C) market value of old and new final goods and services sold in the economy in a given time period. D) market value of final goods and services produced in the economy in a given time period. 2) The factor market can best be described as where A) households buy goods and services. B) firms buy goods and services. C) firms buy the services of labor, land and capital. D) governments sell goods and services. 3) Choose the best statement. A) GDP equals aggregate expenditure and equals aggregate income. B) An increase in government purchases increases aggregate expenditure but does not change GDP. C) An increase in compensation of employees increases aggregate income but does not change GDP. D) GDP always equals aggregate expenditure and sometimes equals aggregate income. 4) Which of the following relationships is correct? A) Net Investment = Gross lnvestment + Depreciation B) Consumption expenditure = Net Investment − Depreciation C) Gross Investment = Net Investment + Depreciation D) Depreciation = Gross Investment - Consumption expenditure 5) In 2011, Armenia had a real GDP of $4.21 billion and a population of 2.98 million. In 2012 , real GDP was $4.59 billion and population was 2.97 million. What was Armenia's economic growth rate from 2011 to 2012 ? A) 0.38 percent B) 9.0 percent C) 3.8 percent D) 8.3 percent Page 12 of 15 FACULTY OF COMMERCE, MANAGEMENT AND LAW 6) Using the Rule of 70, if China's current growth rate of real GDP per person was 7 percent a year, how long would it take the country's real GDP per person to double? A) 35 years B) 14 years C) 10 years D) 49 years 7) The curvature of the production function shows that as employment increases, the productivity of labor A) remains positive and increases. B) remains positive but decreases. C) decreases and becomes negative. D) remains constant. 8) Suppose the money wage rate and the price level both fall by 5 percent. As a result, A) the quantity of labor demanded increases. B) the quantity of labor demanded decreases. C) the quantity of labor demanded does not change because there is no change in the real wage. D) people are worse off and there is more unemployment. 9) Which of the following statements is incorrect? A) The labor force is equal to the number of people employed plus the number of people unemployed. B) The working age population includes everyone over the age of 16 . C) The unemployment rate is the number of persons who are unemployed divided by the labor force then times 100 . D) The labor-force participation rate is the labor force divided by the working-age population then times 100 . 10) In an economy, 42 million people are in the labor force, 38 million are employed, and 47 million are of working age. How many people are not in the labor force? A) 19 percent B) 9 million C) 5 million D) 4 million