ECON 2030 EXAM 1 QUESTIONS AND
ANSWERS 100% PASS 2026 EDITION
Micro Economics - ANS The study of how
households and firms
make decisions and
how they interact in
markets
Macro Economics - ANS The study of economy-
wide phenomena,
including inflation,
unemployment, and
economic growth
GDP's (y) 4 componets - ANS 1. consumption-C (Spending by households on goods (duarable
and nondurable) and services, with the
exception of purchases of new housing)
2. Investment -I ( purchase of a new house, Spending on business capital, residential
capital, and inventories)
3. Government Purchases-G (Spending on goods and
services by local, state, and
federal governments, excludes transfer payments like Social Security or
1
@2026 EDITION ALLRIGHTS RESERVED
, unemployment insurance
benefits)
4. Net Exports- NX ( Spending on domestically produced goods by foreigners
(exports) minus spending on foreign goods by domestic
residents (imports))
Circular Flow Diagram - ANS llustrates GDP as spending, revenue, factor
payments, and income
Factors of Production - ANS inputs like labor, land, capital, and natural
resources. Factor payments are payments to the factors of production ex rent, wages, etc
What does the circular flow diagram omit - ANS the government, the financial system, and
the foreign sector
"GDP Is the
Market Value . . ." - ANS goods are valued at their market prices, and services like housework
are not included in the market
GDP includes... - ANS all items produced in the economy and sold legally in markets, it does
not include illegal produced and sold items.
Final Goods (GDP only includes these bc intermediate goods have already been included in the
making of a final good) - ANS Goods intended
for the end user (ex- cars, clothing, pizza, washing machine)
Intermediate Goods - ANS Goods used as
components or
ingredients in
2
@2026 EDITION ALLRIGHTS RESERVED
ANSWERS 100% PASS 2026 EDITION
Micro Economics - ANS The study of how
households and firms
make decisions and
how they interact in
markets
Macro Economics - ANS The study of economy-
wide phenomena,
including inflation,
unemployment, and
economic growth
GDP's (y) 4 componets - ANS 1. consumption-C (Spending by households on goods (duarable
and nondurable) and services, with the
exception of purchases of new housing)
2. Investment -I ( purchase of a new house, Spending on business capital, residential
capital, and inventories)
3. Government Purchases-G (Spending on goods and
services by local, state, and
federal governments, excludes transfer payments like Social Security or
1
@2026 EDITION ALLRIGHTS RESERVED
, unemployment insurance
benefits)
4. Net Exports- NX ( Spending on domestically produced goods by foreigners
(exports) minus spending on foreign goods by domestic
residents (imports))
Circular Flow Diagram - ANS llustrates GDP as spending, revenue, factor
payments, and income
Factors of Production - ANS inputs like labor, land, capital, and natural
resources. Factor payments are payments to the factors of production ex rent, wages, etc
What does the circular flow diagram omit - ANS the government, the financial system, and
the foreign sector
"GDP Is the
Market Value . . ." - ANS goods are valued at their market prices, and services like housework
are not included in the market
GDP includes... - ANS all items produced in the economy and sold legally in markets, it does
not include illegal produced and sold items.
Final Goods (GDP only includes these bc intermediate goods have already been included in the
making of a final good) - ANS Goods intended
for the end user (ex- cars, clothing, pizza, washing machine)
Intermediate Goods - ANS Goods used as
components or
ingredients in
2
@2026 EDITION ALLRIGHTS RESERVED
