Economic Development Course Assessment Schedule

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How does fiscal policy primarily affect the aggregate demand?

By directly shifting the aggregate-demand curve (correct)

By influencing saving and investment in the long run

By decreasing the money supply

By increasing the interest rate

What does fiscal policy refer to?

Government's choices regarding government purchases and taxes (correct)

Government's control over money supply and interest rates

Government's management of inflation and unemployment

Government's influence on the exchange rate

What is the main effect of changes in government purchases on aggregate demand?

It influences saving and investment in the long run

It increases the interest rate

It shifts the aggregate-demand curve directly (correct)

It decreases the aggregate demand

What is the primary impact of fiscal policy on aggregate demand in the short run?

Primarily affects aggregate demand Signup and view all the answers

How does fiscal policy influence saving, investment, and growth in the long run?

By influencing saving, investment, and growth Signup and view all the answers

What is the multiplier effect in the context of government purchases?

It is the phenomenon where every dollar spent by the government raises aggregate demand by more than a dollar. Signup and view all the answers

What happens to investment spending when an increase in government purchases causes the interest rate to rise?

Higher interest rates lead to a reduction in investment spending. Signup and view all the answers

What is the formula for the spending multiplier if the marginal propensity to consume (MPC) is 3/4?

Multiplier = 1/(1 – 3/4) = 4 Signup and view all the answers

What is the crowding-out effect in the context of fiscal policy?

It indicates the reduction in demand caused by a fiscal expansion raising the interest rate. Signup and view all the answers

How does a larger marginal propensity to consume (MPC) affect the multiplier in an economy?

A larger MPC increases the multiplier effect. Signup and view all the answers

What is the measure of economic growth?

Increase in real gross domestic product (GDP) Signup and view all the answers

What does the Human Development Index measure?

Longevity and knowledge acquisition Signup and view all the answers

What does the Value Added approach to GDP measure?

Dollar value contributed to a final good at each stage of production Signup and view all the answers

What is a sign of recession or economic downturn?

High unemployment rate Signup and view all the answers

What does the Sustainable Development Goals (2015-2030) aim to achieve?

Sustainable development and economic growth Signup and view all the answers

Which type of assessment counts for the highest percentage in the course?

Final examination Signup and view all the answers

When is the group project due?

Week 12 Signup and view all the answers

What does GDP stand for?

Gross Domestic Product Signup and view all the answers

What is the primary importance of economic growth to economic development?

Increasing GDP per capita Signup and view all the answers

Which approach is used to compute GDP by accounting for final goods and services in local currency values within a 1-year accounting period?

Expenditure approach Signup and view all the answers