Economics Quiz

A tax system where the cost of collection is minimal compared to revenue is said to be:

• Flexible

• Economical

• Certain

• Simple

A tax that takes a higher percentage from low-income earners than high-income earners is:

• Progressive

• Proportional

• Regressive

• Direct

Net Domestic Product (NDP) is calculated as:

• GDP + Depreciation

• GDP – Depreciation

• GNP – Net income from abroad

• GNP + Depreciation

Disposable income is:

• Income before tax

• Income after tax

• Corporate income

• Government revenue

Double counting in national income accounting is avoided by:

• Including all intermediate goods

• Using value-added method

• Adding imports to GDP

• Ignoring exports

An injection into the circular flow of income is:

• Taxes

• Savings

• Government spending

• Imports

The marginal propensity to consume (MPC) is:

• Change in consumption / Change in income

• Total consumption / Total income

• Change in savings / Change in income

• Total savings / Total income

If MPC is 0.8, what is MPS?

• 0.2

• 0.8

• 1.0

• 0.5

An increase in exports will:

• Reduce national income

• Increase national income

• Have no effect

• Increase inflation only

A budget surplus means:

• Government spends more than it earns

• Government earns more than it spends

• Revenue equals expenditure

• High inflation