Name: ____________________

Student ID:________________

LINCOLN UNIVERSITY

Semester 1, 2024

Test 1

Instructions:

This Test consists of SIX (6) questions.

You are required to answer ALL questions.

Marks allocated to each question are indicated.

This is an OPEN BOOK test.

Please check that your copy is complete.

This is an individual test.

It is recommended to use the Calibri 12-point font with 1.5 spacing. Choose your alignment: Justified.

If you want to include graphs to facilitate your discussion, it is acceptable that you copy the hand-drawing graphs from your notebook to your test paper.

Please prepare your answers directly below each question. You do not need to prepare a separate answer sheet.

There is no word limit for Questions 1 and 4. You just show your best answers.

Deadline:

This is a time-restricted test. Any type of plagiarism is not permitted.

You can download the test requirements after 11 am on 10 May (Friday). You must upload your answer sheet to Learn Site before 11 am on 13 May (Monday).

Please do not remove the questions from your answer sheet.

Late submission will be marked as zero.

Weight: 30% of your final marks

TOTAL MARKS: 50

Distinguish between real GDP and potential GDP and describe how each changes over time. Show your workings.

(5 marks)

Classify each of the following items as a final good or service or an intermediate good or service and identify each of the items as either a component of consumption expenditure, investment or government expenditure on goods and services.

(8 marks)

Security system bought by the ANZ Bank.

New coffee grinders bought by Starbucks.

Starbuck’s grande mocha frappuccino bought by a student at a campus coffee bar.

New helicopters bought by Australia’s army.

Use the following data to calculate aggregate expenditure and exports of goods and services. Show your workings.

Government expenditure: $39 billion

Aggregate income: $900 billion

Consumption expenditure: $211 billion

Investment: $221 billion

Imports of goods and services: $230 billion

(6 marks)

Why does unemployment arise and what makes some unemployment unavoidable? Please explain.

marks)

The Bureau of Statistics in country A reported the following data for October 2023:

Labour force participation rate: 79.9 per cent

Working-age population: 19,429,826

Employment-to-population ratio: 75.9 per cent

Please calculate the labor force and unemployment rate. Show all your workings.

Labor force. (5 marks)

Unemployment rate. (5 marks)

In March 2023, in the economy of Country B, 10,000 people were employed, 1,000 were unemployed, and 5,000 were not in the labour force. By the end of April 2023, 80 people lost their jobs and were actively looking for new ones, 20 people quit their jobs and were actively looking for better ones, 150 unemployed people started a job, 50 unemployed people felt disappointed with the job markets and chose to quit the labour force, 150 people lost their jobs and did not look for new ones, and 90 people quit their jobs and retired.

Calculate for the end of April 2023. Show your workings.

Unemployment rate. (5 marks)

Employment-to-population ratio. (5 marks)

Labor force participation rate. (5 marks)