 IBDP Economics HL   (https://intercom.

help/kognity) 

Overall Level of Economic Activity results

Your score: 100%

Your answers

Here you nd the breakdown of your result. Click on a question to view the details.

 Question 1

Question

Given that Brazil’s nominal GDP was $45 billion in 2013 and $50 billion in 2014, and that the
GDP deflator for 2013 is 100 while the GDP deflator for 2014 is 104, what was Brazil’s real
GDP growth rate from 2013 to 2014?

Type the answer with two decimal places as “__________%”

Your answer - correct

6.84

Accepted answers
6.84%
6.84 %
6.84

Explanation:
The real GDP for a given year is calculated as the nominal GDP divided by the GDP deflator,
multiplied by 100. Thus, Brazil’s real GDP was equal to ($45 billion)/100) ´ 100 = $45 billion
2013 and was equal to(($50 billion)/104) ´ 
in 100 = $48.08 billion in2014. The real GDP 
Overview Book Notebook Practice Assignments
 growth rate from one year to the next is calculated as (New Real GDP – Old Real GDP)/(Old
 Real
IBDPGDP).
Economics HL the growth rate from 2013 to 2014
Thus,  (https://intercom.help/kognity)
 is equal to ($48.08 billion - $45 
billion)/($45 billion) = 6.84%

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 Question 2

Question

Given the table of expenditures in a given country below, calculate the country’s GNP/GNI in
the given year using the expenditure approach.

(Please type the answer as a whole number with no decimals in the format “$ x billion”.
Remember to include the dollar sign and billion, it's good practice for Paper 3)

Consumer expenditure $435 billion

Investment $303 billion

Government spending $103 billion

Import expenditure $345 billion

Export revenue $398 billion

Income earned abroad by the country’s $54 billion

citizens/firms

Income earned in the country by foreign $35 billion

citizens/firms

Your answer - correct

$913 billion

Accepted answers
$913 billion
$ 913 billion
$913billion

Explanation:
    
Overview Book Notebook Practice Assignments
 GNP/GNI is equal to GDP plus net income earned abroad by the country’s nationals. Since
 GDP HL using the expenditure approach (https://intercom.help/kognity)
IBDP Economics
is calculated as C +
I + G + (X – M), the GDP of this 
country is equal to $435 billion + $303 billion + $103 billion + ($398 billion - $345 billion) =
$894 billion.

Net income earned abroad, which is equal to the income earned abroad minus the income paid
to foreign citizens and firms earning money in the home country, is equal to $54 billion - $35
billion = . Thus, the GNP/GNI in the country is equal to $894 billion + $19 billion = $913
billion.

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 Question 3

Question

Real GDP growth in a country has been decreasing for an entire year. Is the country
necessarily in a contractionary period of the business cycle? (Yes/No)

Your answer - correct

No

Accepted answers
No
No.

Explanation:
While an entire year’s worth of negative real GDP growth would indeed mean that the
country was in a contractionary period, merely decreasing real GDP growth means that the
country could still be experiencing positive real GDP growth (that is, an increasing real GDP
— an expansionary period) although the rate of increase of real GDP is slowing down.

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 Question 4

    
Question
Overview Book Notebook Practice Assignments
 Given that Poland’s nominal GDP was $25.00 billion in 2013 and $30.00 billion in 2014, and
 that
IBDPthe
Economics HL
GDP deflator for 2013 is 95 while the GDP  (https://intercom.help/kognity)
deflator for 2014 is 100, what was 
Poland’s real GDP in 2013 and in 2014, respectively?

Make sure you include the unit ($) and scale (thousand, million etc) for your answer.
Separate the two answers with a comma or semi-colon.

All calculations in DP Economics should be to 2 d.p.

Your answer - correct

$26.32 billion, $30.00 billion

Accepted answers
$26.32 billion, $30.00 billion
$26.32 billion, $30 billion
$26.31 billion, $30.00 billion
$26.31 billion, $30 billion
$26.31 billion; $30 billion
$26.32 billion; $30.00 billion

Explanation:
The real GDP for a given year is calculated as the nominal GDP divided by the GDP deflator,
multiplied by 100. Thus, Poland’s real GDP was equal to ($25 billion)/95) ´ 100 = $26.32
billion in 2013 and was equal to (($30 billion)/100) ´ 100 = $30.00 billion in 2014.

You should have written answers to 2 d.p., included the $ sign and the word billion. You will
lose marks in Paper 3 without them.

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 Question 5

Question

What economic term is defined as two consecutive quarters of negative economic growth?

Your answer - correct

Recession
    
Overview Book Notebook Practice Assignments
 Accepted answers

 Recession HL
IBDP Economics   (https://intercom.help/kognity) 
economic recession
recession

Explanation:
A recession is a time period in which real GDP is decreasing — that is, when the economic
growth rate is negative (not simply when the economic growth rate is decreasing but still
positive). A recession will end after a trough or bust, after which the economy goes into
recovery and enters an expansionary phase.

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 Question 6

Question

Given the table giving a country’s GDP, GNI, loss of value of capital stock, and
environmental costs of production in a given year below, calculate the country’s green GDP.
(Type the answer in full - i.e. with currency)

GDP $38 billion

GNI $42 billion

Loss of value of capital stock $1 billion

Environmental costs of production $2 billion

Your answer - correct

$36 billion

Accepted answers
$36 billion
36 billion dollars
36 billions USD

Explanation:
Green GDP is calculated as the country’s GDP minus the environmental costs of that year’s
production.
 Thus, the green
 GDP for this country
 = $38 billion - $2 billion
 = $36 billion. 
Overview Book Notebook Practice Assignments
 + Report feedback or error ()
 IBDP Economics HL   (https://intercom.help/kognity) 

 Question 7

Question

According to macroeconomic theory, national output is equal to national income. What is a

third measure of the level of overall economic activity that is theoretically equal to national
output and national income? (Two words)

Your answer - correct

national expenditure

Accepted answers
National expenditure
expenditure method
expenditure
Expenditure method
expenditure approach
total expenditure
national expenditures
total expenditures
expenditure methods

Explanation:
National expenditure, which is what consumers, firms, businesses, and foreigners pay in
exchange for goods and services, constitute a part of the circular flow of income and are
necessarily equal to the level of national output (which is what the expenditure is paying for)
and national income (which is what households receive for producing those very goods and
services).

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 Question 8

Question

    
Overview Book Notebook Practice Assignments
 The diagram below plots a country’s real output over time. What is the term used to refer to it
 and   (https://intercom.help/kognity)
IBDPtoEconomics HL
the fluctuations (periodic increases and decreases) of real output as it trends upward 
over time? (Two words)

Your answer - correct

business cycle

Accepted answers
Business cycle
The business cycle
The economic cycle
economic cycle
Business cycles

Explanation:
The business cycle is the term used to refer to the periods of contraction and expansion that an
economy will tend to go through even as the long-term trend of real GDP is upward.

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 Question 9

Question
    
Overview Book Notebook Practice Assignments
 What is the measure of national product that takes into account the size of the country’s
 population
IBDP Economics HL as?
known   (https://intercom.help/kognity) 

Your answer - correct

GDP per capita

Accepted answers
GDP per capita
per capita GDP
Gross domestic product per capita
GNP per capita
Gross national product per capita
GNI per capita
Gross national income per capita
per capita GDP

Explanation:
GDP per capita — “per head” — is a measure of national product that divided the size of the
GDP by the size of the country’s population, thus getting a measure of national product per
person.

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 Question 10

Question

Given the table of expenditures in a given country below, calculate the country’s GDP using
the expenditure approach.

Consumer expenditure $14 billion

Investment $8 billion

Government spending $3 billion

Import expenditure $8 billion

Export revenue $7 billion

Income earned abroad by the country’s $4 billion

citizens/firms
    
Overview Book Notebook Practice Assignments
 Income earned in the country by foreign $1 billion
 IBDP Economics HL
citizens/firms   (https://intercom.help/kognity) 

Correct choice

#1
Your choice
$24 billion.

Explanation:

GDP according to the expenditure approach is the sum of consumer expenditure,

investment, government spending, and net export revenue (export revenue minus import
expenditure). Thus, GDP in this country is calculated as $14 billion + $8 billion + $3
billion + ($7 billion - $8 billion) = $24 billion. Income earned and paid abroad is only
calculated as part of a country’s GNP/GNI, not GDP.

Incorrect choices

#2
$27 billion.

#3
$26 billion.

#4
$25 billion.

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 Question 11

Question

Which of the following activities will be measured and counted as part of a country’s GDP?

Correct choice

#1
Your choice    
Overview Book
Government spending on the building of Notebook
a new school. Practice Assignments
 Explanation:

 Government
IBDP Economics spending
HL  and
constitutes spending on goods  (https://intercom.help/kognity)
services by the government and
thus constitutes a part of GDP. For instance, when calculating GDP using the expenditure
method government spending constitutes one of four components of GDP (the other three
being spending by households, firms, and net spending by foreigners on exports).
Depreciation is counted as part of NNI, not GDP, transfer payments do not constitute
spending on goods and services but merely a redistribution in income, and undocumented
wages by their very nature cannot be counted as part of GDP.

Incorrect choices

#2
Depreciation of a factory’s machinery resulting from overuse.

#3
Transfer payments from the government to senior citizens.

#4
Undocumented wages paid in cash to window-cleaners.

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 Question 12

Question

A Canadian furniture manufacturer is earning profits selling furniture in Russia. In what

country’s GDP, and in what country’s GNP, will this income be counted?

Correct choice

#1
Your choice
The income is part of Russian GDP and Canadian GNP

Explanation:

GDP, or gross domestic product, measures the economic activity occurring within a
country in a given year. Since the Canadian firm conducing business within Russia, its
income there is counted
 as part of Russian GDP.
 However, GNP measures
 the economic 
Overview Book Notebook Practice Assignments
 activity produced by citizens (or firms) from a particular country. Thus, since the firm is
 (https://intercom.help/kognity)
IBDP Economics
Canadian, its HL
income (even if earned in Russia)  as part of Canadian GNP.
is counted 

Incorrect choices

#2
The income is part of Russian GDP and Russian GNI.

#3
The income is part of Canadian GDP and Russian GNP

#4
The income is part of Russian GDP and both Canadian and Russian GNP

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 Question 13

Question

Which of the following is not a leakage from the circular flow of income in an open
economy?

Correct choice

#1
Your choice
Consumer expenditure.

Explanation:

In the circular flow, consumer expenditure passes from households to firms in exchange
for goods and services, thus keeping the money within the flow between firms and
households — the revenue that firms make from selling goods and services is also used
to pay households for the factors of production that firms use in order to produce their
goods and services. In contrast, savings, taxes, and import expenditure are all leakages
from this flow between firms and households, as the income concerned goes to banks, the
government, or foreign countries respectively.

    
Overview Book Notebook Practice Assignments
 IBDP Economics HL   (https://intercom.help/kognity) 
Incorrect choices

#2
Savings

#3
Taxes

#4
Import expenditure.

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 Question 14

Question

Which of the following does not constitute a payment made by firms to households in return
for factors of production?

Correct choice

#1
Your choice
Goods and services.

Explanation:

Goods and services are provided by firms to households, they are provided in return for
consumer expenditure, not for factors of production. Interest, rent, and profits are all
payments for the factors of production of capital, land, and entrepreneurship (with the
final factor of production and corresponding payment being labor and wages).

Incorrect choices

#2
Interest

#3
Rent    
Overview Book Notebook Practice Assignments
 #4
 Profits
IBDP Economics HL   (https://intercom.help/kognity) 

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 Question 15

Question

Given the diagram of the circular flow of income in a closed economy below, what two
entities should be filled in as a and b, respectively?

Correct choice

#1
Your choice
Firms, households.

Explanation:

In the circular flow of income in a closed economy, households provide factors of

production to firms in return for their respective payments, and firms provide goods and
services to households in return for consumer expenditure.

Incorrect choices

#2
Government, firms.

    #3

Firms, government.
Overview Book Notebook Practice Assignments
 #4
 IBDP Economics HL
Households, firms.   (https://intercom.help/kognity) 

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 Question 16

Question

Which method of measuring national income records the earnings from the factors of
production?

Your answer - correct

Income method

Accepted answers
Income method
Income
Income approach
The income approach
The income method
the income approach

Explanation:
In theory, we spend all our income on the output of firms. Look at Figure 3 to see how we
have a dual role in the economy to earn and spend. When we sell our factors of production,
we earn wages, interest, rent or profit, depending on the factor sold.

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 Question 17

Question

If the real GDP of a country in 2010 was US$46.5 billion and US$51.6 billion in 2011, by
how much did the economy grow?

    
Overview Book Notebook Practice Assignments
 IBDP Economics HL   (https://intercom.help/kognity) 
Correct choice

#1
Your choice
11%

Explanation:

Finding the growth is simply a matter of calculating percentages. The growth will be
equal to .
51.6−46.5
× 100 = 11%
46.5

Incorrect choices

#2
9%

#3
8%

#4
10%

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 Question 18

Question

If the real GDP of a country in 2010 was US$305.3 billion and US$319.0 billion in 2011, by
how much did the economy grow?

Correct choice

#1
Your choice
4.5%

Explanation:

Finding the growth is simply a matter of calculating percentages. The growth will be
319.0 − 305.3
equal to  × 100 = 4.5% .   
Overview 305.3 Book Notebook Practice Assignments
 IBDP Economics HL   (https://intercom.help/kognity) 

Incorrect choices

#2
3%

#3
6%

#4
7.5%

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 Question 19

Question

Which portion of the business cycle below shows a trough?

Correct choice
    
Overview Book Notebook Practice #1
Assignments
Your choice
 3
 IBDP Economics HL   (https://intercom.help/kognity) 
Explanation:

A trough is a point where GDP is minimum. The portion labelled 3 shows such a period.

Incorrect choices

#2
1

#3
2

#4
4

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 Question 20

Question

What portion of the business cycle below shows a recovery?

    
Overview Book Notebook Practice Assignments
 IBDP Economics HL   (https://intercom.help/kognity) 
Correct choice

#1
Your choice
4

Explanation:

A recovery occurs when GDP is increasing. The portion labelled 4 shows such a period.

Incorrect choices

#2
1

#3
2

#4
3

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 Question 21

Question

What is GDP per capita?

Correct choice

#1
Your choice
GDP divided by the size of the population

Explanation:

GDP per capita, or GDP per person, is the average income earned by citizens of a
country. It is the GDP divided by the size of the population. It is useful to compare GDP
figures between different countries.

    
Overview Book Notebook Practice Assignments
 IBDP Economics HL   (https://intercom.help/kognity) 
Incorrect choices

#2
GDP adjusted for inflation

#3
GDP after capital depreciation

#4
GDP per unit of capital in the economy

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 Question 22

Question

What is real GDP?

Correct choice

#1
Your choice
Nominal GDP adjusted for inflation

Explanation:

Real GDP is indeed the nominal GDP adjusted for inflation. If we have to compare
growth from one year to another, we need to compare real values to avoid getting fooled
by inflation.

Incorrect choices

#2
Nominal GDP per person

#3
Nominal GDP after capital depreciation

    
#4
Overview
The theoretical GDPBook
of a country, not theNotebook
one measured Practice Assignments
 + Report feedback or error ()
 IBDP Economics HL   (https://intercom.help/kognity) 

 Question 23

Question

Which of the following measures the value of all final goods and services produced using
factors of production owned by the nationals (residents) of the country?

Correct choice

#1
Your choice
GNP

Explanation:

The gross national product (GNP) measures the value of all final goods and services
produced using factors of production owned by the nationals (residents) of the country.

Incorrect choices

#2
GDP

#3
NDP

#4
NNP

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 Question 24

Question

Which of the following measures the value of all final goods and services produced by all the
    
firms within
Overview the geographical
Book borders of a country?
Notebook Practice Assignments
 IBDP Economics HL   (https://intercom.help/kognity) 
Correct choice

#1
Your choice
GDP

Explanation:

The gross domestic product (GDP) measures the value of all final goods and services
produces by all firms within the geographical boundaries of a country.

Incorrect choices

#2
GNP

#3
GNI

#4
NDP

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 Question 25

Question

How are national expenditure, national income and national output related in an economy
which is said to be in equilibrium?

Correct choice

#1
Your choice
Expenditure = Income = Output

Explanation:

Theoretically, because of the circular flow of income model, we expect national

expenditure, income and output to be equal to each other in an economy which is in a
    
state
Overview of equilibrium. Book
In reality, however, the values may be different
Notebook due to measurement
Practice Assignments
 difficulties.
 IBDP Economics HL   (https://intercom.help/kognity) 

Incorrect choices

#2
Expenditure < Income < Output

#3
Output < Income < Expenditure

#4
It depends on the economy

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 Question 26

Question

The output method is used to calculate national income. What does it measure?

Correct choice

#1
Your choice
The total value of all final goods and services

Explanation:

The output method measures the total value of all final goods and services produced in an
economy in order to calculate national income.

Incorrect choices

#2
Rent, wages, interest and profits

#3
Total consumer spending
   
Overview Book Notebook Practice Assignments
 #4
Taxes
 IBDP Economics HL   (https://intercom.help/kognity) 
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 Question 27

Question

The expenditure method is used to calculate national income. What does it measure?

Correct choice

#1
Your choice
Total spending i.e. C+I+G+X-M

Explanation:

The expenditure method measures how much households, firms, the government and
other nations (net) spend on goods and services in an economy.

Incorrect choices

#2
Rent, wages, interest and profits

#3
The total value of all final goods and services

#4
Taxes

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 Question 28

Question
    
The income
Overview method is Book
used to calculate national income. What does
Notebook it measure?
Practice Assignments
 IBDP Economics HL   (https://intercom.help/kognity) 
Correct choice

#1
Your choice
Rent, wages, interest and profits

Explanation:

The income method measures how much money households get from providing factors
of production to a firm. Households will be compensated with the appropriate payments:
rent (for land), wages (for labour), interest (for capital) and profits (for entrepreneurship).
The income method measures the sum of all these payments.

Incorrect choices

#2
Total consumer spending

#3
The total value of all final goods and services

#4
Taxes

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 Question 29

Question

What do households get back from firms in return for their expenditure?

Correct choice

#1
Your choice
Goods and services

Explanation:

In the circular flow of income model, households spend their income, gained from
    
providing
Overview the factorsBook
of production to firms, on goods and services.
Notebook Practice Assignments
 IBDP Economics HL   (https://intercom.help/kognity) 

Incorrect choices

#2
Rent, interest, wages and profit

#3
Factors of production

#4
Taxes

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 Question 30

Question

Who provides the factors of production in an economy?

Correct choice

#1
Your choice
Households

Explanation:

In the circular flow of income model, households provide the factors of production (land,
labour, capital and entrepreneurship) to the firms, for which, in return, they receive
income.

Incorrect choices

#2
Firms

#3
The government
    
Overview Book Notebook Practice Assignments
 #4
 They
IBDP are not provided
Economics HL by anyone since they already
  (https://intercom.help/kognity)
exist 

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Assignment information
Submitted:

Deadline:
2020-03-26 09:20

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    
Overview Book Notebook Practice Assignments