Grade 9 Economics Worksheet

Chapter 7: Introduction to Macroeconomics

Part A: True/False Questions (1 mark each) Write “True” if the statement is correct and
“False” if it is not.

1. Macroeconomics deals with the behavior of individual consumers.

2. One of the main goals of macroeconomics is full employment.
3. Inflation causes the value of money to increase.
4. Unemployment is a major macroeconomic problem.
5. Price stability is not important in macroeconomics.
6. Economic growth means a country is producing more goods and services.
7. A trade deficit means a country imports more than it exports.
8. The Balance of Payments includes only the trade of goods.
9. A trade surplus can help increase a country’s foreign currency reserves.
10. A BOP deficit can lead to borrowing from international financial institutions.
11. A country always benefits from a trade deficit.
12. Exporting more than importing results in a trade surplus.
13. GDP measures only the value of goods and services produced by citizens of a country.
14. GNP includes income earned by a country's citizens working abroad.
15. Per capita income helps us understand the average income of a person in a country.
16. Inflation causes the purchasing power of money to increase.
17. Macroeconomics deals with large-scale economic indicators like national income.
18. If a country’s population grows faster than its GDP, per capita income may decrease.
19. Unemployment is not considered a macroeconomic problem.
20. A higher per capita income always means everyone is rich.

Part B: Multiple Choice Questions (1 mark each) Choose the correct answer.

1. What does GDP measure?

A. Income of citizen’s abroad B. Total production within a country

C. Money sent by workers abroad D. Profits from foreign companies only

2. Which of the following is included in GNP but NOT in GDP?

A. Government spending B. Investment by local businesses

C. Exports of local goods D. Income earned by nationals working abroad

3. If a foreign company earns money in Ethiopia, it is included in:

A. Only GNP B. Only GDP C. Both GDP and GNP D. Neither GDP nor GNP

4. Which of the following is not a macroeconomic variable?

A. Unemployment B. Inflation C. GDP D. Personal shopping habits

5. Per capita income is calculated by:

A. Total exports ÷ total imports B. GDP ÷ total population

C. GNP ÷ national debt D. Total wages ÷ working population

6. A high inflation rate usually means:

A. Prices are falling B Employment is increasing

C. The cost of living is rising D. The value of money is increasing

7. GNP includes:

A. Only goods made inside the country B. Only foreign investment

C. Total output by a nation’s citizens anywhere D. Government budget

8. What happens to per capita income if GDP increases and population remains the same?

A. It decreases B. It stays the same C. It increases D. It disappears

9. Which of the following would increase a country's GNP but not its GDP?

A. A new hospital built in Addis Ababa B. A foreign company operating in Ethiopia

C. An Ethiopian Company earning profits in Kenya D. Local farmers selling in domestic markets

10. If Ethiopia’s GDP is 1 trillion birr and its population is 100 million, what is the per capita
income?

A. 100 birr B. 1,000 birr C. 10,000 birr D. 1,000,000 birr

11. The fundamental problem studied in macroeconomics is

A. Price determination of individual commodities B. Allocation of resources in specific markets

C. Full employment of economic resources D. Equilibrium of individual producers and consumers

12. Macroeconomics is the study of:

A. How a family manages its budget B. How an individual chooses to spend money

C. The economy as a whole, including national income and inflation D. How a business sets prices

13. Which of the following is a macroeconomic variable?

A. The price of a pencil B. The wage of one worker

C. The national unemployment rate D. The cost of one company’s product

 14. Which of the following is a goal of macroeconomics?

A. To reduce competition B. To lower business taxes

C. To achieve economic growth and low unemployment D. To control one company’s profits

15. One major macroeconomic problem is:

A. A broken cash register B. High inflation

C. A business changing its prices D. A student failing an economics test

16. Inflation is best described as:

A. An increase in the price of one good B. A rise in the general level of prices in an economy

C. A fall in the price of food only D. A government tax

17. Which of the following is not a macroeconomic goal?

A. Price stability B. Economic growth

C. Full employment D. Increasing one company’s profit

18. Inflation is a situation where:

A. The government prints more money B. Prices of all goods fall rapidly

C. The general price level in the economy increases D. The value of exports increases

19. Demand-pull inflation occurs when:

A. The cost of raw materials rises B. Too much money chases too few goods

C. Workers go on strike D. Taxes increase

20. Cost-push inflation is caused by:

A. A fall in consumer demand B. A decrease in money supply

C. An increase in production costs D. Low interest rates

21. Unemployment means:

A. People work part-time jobs B. People are unwilling to work

C. People are able and willing to work but cannot find jobs D. People are lazy

22. A person who is temporarily between jobs is considered:

A. Structurally unemployed B. Frictionally unemployed

C. Cyclically unemployed D. Not part of the labor force

 23. Cyclical unemployment happens mainly because of:

A. Poor education B. Changes in technology

C. Economic recessions or downturns D. Aging population

24. Structural unemployment is caused by:

A. A mismatch between workers’ skills and available jobs B. Seasonal holidays

C. Too many government jobs D. High inflation

25. A trade deficit means:

A. Exports are greater than imports B. Imports are greater than exports

C. There are no trade partners D. The government exports services

26. The trade balance is calculated by:

A. Imports + Exports B. Exports – Imports C. Imports – Exports D. Government spending – tax

27. A country has a trade surplus when:

A. Exports equal imports B. Imports are greater than exports

C. Exports are greater than imports D. It receives foreign aid

28. Which of the following is a result of a trade deficit?

A. More foreign exchange earned B. Increase in national savings

C. More borrowing from other countries D. Growth in exports

29. The Balance of Payments (BOP) records:

A. Only the exports and imports of goods B. Only the financial account

C. All economic transactions with other countries D. Only the capital account

30. A BOP deficit means:

A. A country is receiving more money from abroad B. A country is earning and spending equally

C. A country is spending more foreign currency than it earns D. A country has no exports

31. One cause of a BOP deficit is:

A. Receiving a lot of foreign aid B. Exporting more than importing

C. Large foreign debt payments D. Increasing local production

32. One of the effects of high inflation is:

A. Increase in purchasing power B. Goods become cheaper

C. Decrease in the value of money D. Lower production costs

Match the items in Column A with the correct explanation in Column B.

Column A Column B

1. Inflation A. Increase in total goods and services produced in a country

2. Unemployment B. Study of the economy as a whole

3. Economic growth C. Rise in general price levels

4. Macroeconomics D. A person who wants to work but cannot find a job

5. National income E. Total income earned by a nation's people and businesses