Question

19.
Which of the following counts towards Australia's GDP?

       
Packaging machines in a factory depreciate.

       
Bob's grandma receives pensions from the government every month.

       
A criminal sells drugs on the black market.

       
Zach sells his second-hand car to Victoria without earning profits.

21.
With stricter immigration laws imposed on March 2019, the amount of foreign workers is expected to decrease. How would this affect the economy in the long run?

       
The short-run aggregate supply curve will shift to the left.

       
The long-run aggregate supply curve will shift to the left.

       
The economy will move down along the short-run aggregate supply curve.

       
The economy will move down along the long-run aggregate supply curve.

23.
Which of the following is the M3 measure of the stock of money?
       Currency plus current deposits at commercial banks.
       Currency plus current deposits and other deposits at commercial banks plus deposits at other authorised deposit-taking institutions.
       Currency plus current deposits at non-bank, authorised deposit-taking institutions.
       Currency plus other RBA holdings

Answer 1

19. Option 1 is correct because it is talking about manufacturing in a factory which is a component of GDP.

The other options are incorrect because though pensions are a part of government spending, they are not made in return of a service done in the current accounting year and hence are not a part of the GDP. Similarly, activities which take part in the black market which are illegal in nature cannot be included in the GDP. Finally, second hand car sale is not included in the GDP because it was not produced in the current year and hence no value was added. It would be accounted in the year when it was produced.

21. The answer is option 2. This is because the immigration takes place in the short run where individuals travel back to their home countries. This will shift the long run aggregate supply curve to the left. This is because of the decrease in the total labour supply as well.

The other options are incorrect because this is not short run in nature as the employees will go back to their home countries.

23. The answer is option 2. M3 supply of money can be understood as currency with public, demand deposits plus other deposits and time deposits.

The other options are incorrect because they define the other categories of money.