Economics

1. 1.

   Explain why buying a newly produced domestic machine enters GDP but buying an existing company's shares does not itself enter current GDP.

   [2 marks] · no calculator
2. 2.

   Fictional economy: C = 500, I = 120, G = 180, exports = 90 and imports = 110, all in million currency units. Calculate GDP by expenditure and the trade balance.

   [3 marks]
3. 3.

   Fictional economy: nominal GDP rises from 900 to 990 while the GDP deflator rises from 100 to 110. Calculate real GDP in both years and real growth; explain what nominal growth alone misses.

   [4 marks]
4. 4.

   Fictional simplified economy: marginal propensities to save, tax and import, each measured against additional national income (not disposable income), are 0.20, 0.10 and 0.10. Assume fixed prices and spare capacity. Calculate the multiplier and the final income change from an autonomous investment increase of 30 million; state one limitation.

   [4 marks]
5. 5.

   Fictional case: Tavi's GDP per person rises after a mining boom, but profits largely go abroad and water quality worsens. Evaluate GDP per person as a measure of improved living standards.

   [4 marks] · no calculator
6. 6.

   Fictional case: Hela has idle factories but shortages of trained engineers. Evaluate whether an aggregate-demand stimulus alone can close its output gap without inflation.

   [4 marks] · no calculator

Original, unofficial practice questions from SubjectScout — not official past-paper questions.