1. Which of the following best describes a fiscal policy tool? A. government spending B. bank lending C. financial capital markets D. household spending 2. Scarcity implies that A. consumers would be willing to purchase the same quantity of a good at a higher price. B. it is impossible to completely fulfill the unlimited human desire for goods and services with the limited resources available C. at the current market price, consumers are wlling to purchase more of a good than suppliers are willing to produce. D. consumers are too poor to afford the goods and services available. 3. The difference between nominal GDP and real GDP is: A. nominal GDP measures actual productivity B. nominal GDP adjusts for inflation C. real GDP adjusts for inflation D. real GDP excludes imports and exports 4. Macroeconomics primarily examines A. the behavior of individual households and firms. B. how prices are determined within individual markets. C. broad issues such as national output, employment and inflation. D. the output levels that maximize the profits of business firms 5. The circular flow diagram of economic activity is a model of the: A. flow of goods, services, and payments between households and firms. B. influence of government on business behaviour C. role of unions and government in the economy D. interaction among taxes, prices, and profs.
