WITH IMPORT DUTIES, THE TAX IS LEVIED ON THE PRICE OF THE COMMODITY.

FALSE

SCARCITY REFERS TO THE INADEQUACY OF SUPPLY OF GOODS TO MEET THE

DEMAND OF THE ECONOMY.
FALSE

THE INCOME TAX STRUCTURE IN THE PHILIPPINES ILLUSTRATES THE BENEFITS-

RECEIVED PRINCIPLE.
FALSE

A SALES TAX IS ALWAYS AN AD VALOREM TAX.

TRUE

CLASSICAL ECONOMISTS BELIEVE THAT UNEMPLOYMENT CANNOT TAKE PLACE AS

EVERY AVAILABLE RESOURCE CAN BE PUT TO PRODUCTIVE USE.
TRUE

IT IS THE NATIONAL BUDGET AND NOT THE DBM THAT DETERMINES HOW MUCH EACH
GOVERNMENT AGENCY CAN SPEND FOR THEIR OPERATIONS.
TRUE

FEES PAID BY THOSE WHO GO TO PUBLIC AMUSEMENT PARKS IS AN EXAMPLE OF

THE ABILITY-TO-PAY PRINCIPLE.
FALSE

FISCAL MEASURES WHEN APPLIED WILL BRING ABOUT POSITIVE EFFECTS.

FALSE

AN ESTATE TAX IS AN EXAMPLE OF AN INDIRECT TAX.

FALSE
AN EXCISE TAX IS A TAX CHARGED SPECIFICALLY TO THE COMMODITY’S UNIT OF
MEASUREMENT.
TRUE

GROWTH IN THE ECONOMY DEPENDS UPON THE SUPPLY OF ECONOMIC INPUTS AS

CLAIMED BY CLASSICAL ECONOMISTS.
TRUE

A PROPORTIONAL TAX STRUCTURE IS COMMON AMONG SALE OF GOODS AND

SERVICES.*
True

AN EXCISE TAX IS TYPICALLY HEAVIER THAN A VALUE-ADDED TAX.*

True

MOTORISTS USING HIGHWAYS WITH TOLL FEES ILLUSTRATES THE ABILITY-TO-

PAY PRINCIPLE.*
False

A REGRESSIVE TAX STRUCTURE IS ONE WHERE THE TAX RATE IS INVERSELY

RELATED WITH THE TAX BASE.*
True

NEOCLASSICAL ECONOMISTS DIFFER FROM THE TRADITIONAL CLASSICAL

THINKING BECAUSE OF THEIR BELIEF THAT MONEY SUPPLY INFLUENCES
PRICE LEVELS.*
True

AN EXCISE TAX IS TYPICALLY APPLIED TO A NUMEROUS ARRAY OF GOODS.*

False
NEW CLASSICAL ECONOMISTS BELIEVE THAT DISCRETIONARY FISCAL POLICY
IS DESTABILIZING. *
True

A PROPORTIONAL TAX STRUCTURE IS COMMON AMONG PERSONAL INCOME

TAX.*
False

KEYNESIANS ARGUE THAT GOVERNMENT MUST INTERVENE TO ADDRESS

BUSINESS CYCLE OR FLUCTUATION THROUGH THE USE OF FISCAL AND
MONETARY MEASURES.*
True

IN A PROGRESSIVE TAX STRUCTURE, THE TAX RATE IS POSITIVELY RELATED

TO THE TAX BASE.*
True

INCOME TAX PAYMENT IN THE PHILIPPINES IS REGRESSIVE.*

False

PRICES CAN BE “STICKY UP” WHEN THEY STAY AT LOWER LEVELS DESPITE THE FACT
THAT MARKET CONDITIONS DICTATE THAT THEY SHOULD HAVE ALREADY GONE UP.
FALSE

AS HELD BY THE KEYNESIANS, GOVERNMENT SHOULD SPEND MORE DURING PERIOD

OF MATURITY IN ORDER TO EFFECTIVELY STIMULATE DEMAND.
FALSE

THE PAYMENT OF RESIDENCE TAX IN BARANGAYS IS AN EXAMPLE OF THE BENEFITS-

RECEIVED PRINCIPLE.
FALSE
A VAT IS A SPECIFIC TAX. IT IS BECAUSE OF ITS NATURE AS AN AD VALOREM TAX.
FALSE

CLASSICAL ECONOMISTS ARGUE THAT PRICES, WAGES, AND RATES ARE FLEXIBLE
AND MARKETS ALWAYS CLEAR. BY THE PHRASE “MARKETS ALWAYS CLEAR”, IT
SIMPLY INDICATES THE NOTION THAT THE MARKET CAN ADJUST TO IMBALANCES
OCCURRING IN THE ECONOMY.
TRUE

“STICKY” PRICES MAY RESULT FROM PRODUCERS HAVING A PERFECT KNOWLEDGE

ABOUT THE MARKET.
FALSE

THE BUREAU OF INTERNAL REVENUE IS THE GOVERNMENT AGENCY THAT

PRIMARILY ADMINISTERS TAX COLLECTION ON IMPORTED GOODS.*
False

EXCISE TAXES ARE ALSO CLASSIFIED AS AD VALOREM TAXES.*

False

THERE IS _____ EXTERNALITY WHENEVER A THIRD PARTY SHARES WITH THE

BENEFIT RESULTING FROM AN EXCHANGE TRANSACTION BETWEEN A BUYER
AND SELLER OF A GOOD.*
POSITIVE

MONETARIST ECONOMISTS BELIEVE THAT THE ROLE OF GOVERNMENT IS TO

CONTROL _____ BY CONTROLLING THE MONEY SUPPLY.*
INFLATION

IF COMPANIES ARE UNABLE TO CHANGE THEIR PRICES DUE TO COSTS IN

UPDATING THEM, _____ STICKINESS WILL MOST LIKELY TO OCCUR.*
PRICE
THE QUANTITY THEORY OF MONEY STATES THAT MONEY SUPPLY DIRECTLY
INFLUENCES GENERAL _____ LEVEL.*
PRICE

CLASSICAL ECONOMISTS BELIEVE THAT ANY EXCESS IN SUPPLY OF OR

DEMAND FOR A GOOD CAN BE CORRECTED BY THE SELF-ADJUSTING
MECHANISM OF THE MARKET. THE STABILIZING FACTOR FOR SUCH
IMBALANCES IS THE _____ OF THE GOOD ITSELF.*
PRICE

SINCE NEOCLASSICAL ECONOMISTS BELIEVE THE MARKET IS ALWAYS IN

EQUILIBRIUM, MACROECONOMICS FOCUSES ON THE GROWTH OF _____
FACTORS AND THE INFLUENCE OF MONEY SUPPLY ON PRICE LEVELS.*
SUPPLY

THE NEW KEYNESIANS STILL MAINTAIN THAT THERE ARE VARIOUS MARKET
FAILURES THAT AN ECONOMY WILL EXPERIENCE. COMMON AMONG THESE
FORMS OF MARKET FAILURES ARE "STICKY" PRICES AND _____.*
WAGES

MONETARIST ECONOMISTS BELIEVED THAT GOVERNMENTS COULD CONTROL

INFLATION THROUGH MANIPULATING THE LEVEL OF _____.*
MONEY SUPPLY

THERE IS _____ EXTERNALITY WHENEVER A THIRD PARTY BECOMES A

RECIPIENT ALSO OF THE COST OF AN EXCHANGE TRANSACTION THAT
ORIGINALLY EMANATED BETWEEN A BUYER AND A SELLER OF A GOOD.*
NEGATIVE

THE NEW KEYNESIAN ECONOMISTS ATTEMPTS TO ADD _____ FOUNDATIONS

TO TRADITIONAL KEYNESIAN ECONOMIC THEORIES.*
MICROECONOMIC
According to Rostow, the decisive stage in the five-stage development process is the
take-off, through which developing countries are expected to transit from an
underdeveloped to a developed state.*
T

Adam Smith and Karl Marx are the two most famous thinkers for their two opposite
views on the nation’s system of economic arrangements: one called capitalism and the
other called communism.*
F

Both the Rostow and Harrod-Domar Models emphasized that the prime mover of
economy is investments, hence, the importance of capital to generate investments.*
F

The Lewis Model assumes that excess profits over wages in the modern sector would
be reinvested and shall result to further expansion. Such expansion in output will in turn
generate more employment.*
T

Unlike the Lewis Model, the analysis of Chenery identified that the steady accumulation
of physical and human capital is among conditions necessary for economic growth,
apart from savings and investments.*
T

The narrow goal of economic development is economic growth which is measured in

terms of Gross National Product (or Income).*
T

Unlike the Harrod–Domar model, the Lewis model considered savings and investments
to be the driving forces of economic development but in the context of the less
developed countries.*
T
GNP as a measure of well-being and development is exclusively based on material
wealth.*
T

The neoclassical counter-revolution models were an anti-thesis to the structural change

models. These models mainly argued that underdevelopment is not the result of the
predatory activities of the developed countries and the international agencies but was
rather caused by the domestic issues arising from heavy state intervention such as poor
resource allocation, government-induced price distortions and corruption.*
T

GNP as a measure does not include improvements in welfare such as better healthcare,
education, and more housing for large parts of the whole population.*
T

GNP as a measure does not include improvements in welfare such as better healthcare,
education, and more housing for large parts of the whole population.*
T

Solow neoclassical growth model stresses the importance of three factors of output
growth: increases in labour quantity and quality (through population growth and
education), increases in capital (through savings and investments) and improvements in
technology. Technological change in Solow’s model is provided endogenously.*
T

Under a capitalist system, free trade, private property and competition are seen as the
foundations that would stimulate economic development. Specifically, this would result
solely to economic growth.*
F
Structural change models in the 1960s and early 1970s emphasized the need for
reallocating labor from the industrial sector to the agricultural sector as the key source
for economic growth.*
F

In the 1970s and early 1980s. The dependence theorists argued that underdevelopment
exists because of the dominance of developed countries and multinational corporations
over developing countries.*
T

Adam Smith considers government, in any extent, is unnecessary for an economy to

prosper.*
F

Theorists of the 1950s and early 1960s viewed the process of development as a
sequence of historical stages which built on the historical pattern of developing
countries.*
F

The model suggests an active role for public policy in promoting econ development thru
direct and indirect investments in human capital formation.*
NGM

The growth of output and employment in the modern sector will eventually absorb the
excess labor in the rural sector. This will require increase individual investment and
capital accumulation in the modern sector.*
SCM

The model argues that LDCs consist of two sectors – a traditional overpopulated rural
sector with surplus labor and a high-productivity modern sector.*

SCM
The existence and continuance of underdevelopment is primarily due to the historical
evolution of a highly unequal international capitalist system of rich - poor country
relationship.*
IDM

The model is simply expressed by the equation, Y = Ak, where Y is output, A is any
factor affecting technology, and k is physical and human capital.*
0/1

SCM MAYBE HDM

For a traditional society to move towards an industrial urban-based society, the

mobilization of domestic and foreign savings is necessary to generate sufficient
investment.*
0/2

NGM MAYBE

In order to grow, the economy must save and invest a certain proportion of their
GNP. The more they can save and invest, the faster they grow.*
0/2

NGM MAYBE SCM

Underdevelopment of LDCs is attributed a large part of the 3rd world’s continuing and
worsening poverty to the existence and of the industrial capitalists of the northern
hemisphere and the elite “compradors” in the host LDCs.*
IDM

This theory provides a framework for analysing endogenous growth, persistent GNP
growth that is determined by the system governing the production process rather than
by forces outside of the system.*
NGM
“Good government is minimal government”*
0/2

LSM MAYBE NCM

Compared to structural change theorists, these analysts are pessimistic.*

IDM

Different sets of conditions, of which some are “superior” and others “inferior”, can
coexist in a given space.*
0/2

SCM

A model of a progressive transition from traditional to a modern industrial society.*

0/2

SCM MAYBE LSM

It recognises the many imperfections in LDC product and factor markets and that
governments do have a key role in facilitating the operation of markets thru “market-
friendly” interventions by investing physical and social infrastructures, healthcare
facilities, and educational institutions.*
NCM

The model posits that underdevelopment of LDCs is mainly attributed to corruption in

the government.*
0/2

NCM

Analysts of this model are basically optimistic that the “correct” mix of econ policies will
generate beneficial patterns of self-sustaining growth.*
0/2

IDM MAYBE SCM

Free-market analysis, public choice theory, and market-friendly approach belong to this
model.*
NCM

The model attributes underdevelopment to faulty and inappropriate advice provided by

well-meaning but often uninformed, biased international expert advisers from developed
countries and multilateral donor agencies.*
0/1

SCM MAYBE IDM

Growth rate in this model is expressed in the equation: ∆y/y = s/k where ∆y/y is growth
rate, s is national savings ration, and k is national output ratio.*
HDM

The primary focus of the model is on both the process of labor transfer and the growth
of output & employment in the modern sector.*
SCM

These models view developing countries’ underdevelopment as caused by an

international system of dominance and dependence relationship with rich countries.*
IDM

The engine of economic growth is the transformation of a developing economy’s

economic, industrial, and institutional structure.*
SCM

Development proceeds a linear path.*

LSM

Economists that advocated this model argued that despite variations, one can identify
certain patterns occurring in almost all countries during the development process. Such
patterns may be affected by the choice of development policies of developed nations.*
SCM
Assumes politicians, bureaucrats, citizens, & states act solely from a self-interested
perspective, using power and authority of government for their own selfish ends.*
NCM