CPI THIRD (3RD) EDITION ACTUAL
EXAM PAPER 2026 QUESTIONS WITH
ANSWERS GRADED A+
◍ What does Gross Domestic Product (GDP) measure?.
Answer: Total income of everyone in the economy and total expenditure on
the economy's output of goods and services.
◍ How is GDP related to income and expenditure?.
Answer: Income equals expenditure for the economy as a whole; every
dollar spent by a buyer is a dollar of income for a seller.
◍ What are the components of GDP?.
Answer: Consumption, investment, government spending, and net exports.
◍ All behavior is communication and distress behavior can be how a person
communicates their distress. True/False.
Answer: True
◍ How is GDP corrected for inflation?.
Answer: GDP is adjusted to reflect real GDP, which accounts for changes in
price levels over time.
◍ Does GDP measure society's well-being?.
Answer: No, GDP does not account for factors like income distribution,
environmental quality, or non-market transactions.
◍ What is microeconomics?.
Answer: The study of how households and firms make decisions and interact
in markets.
◍ What is macroeconomics?.
Answer: The study of economy-wide phenomena, including inflation,
, unemployment, and economic growth.
◍ What does the Circular-Flow Diagram illustrate?.
Answer: It depicts GDP as spending, revenue, factor payments, and income
within the economy.
◍ We can use strategies to reduce the likelihood of distress behavior, such as
identifying situations that cause distress, reducing triggers, and helping the
person develop coping strategies. what are these called? a) Reactive
approachesb) Preventive approaches.
Answer: Preventive approaches
◍ What are factors of production?.
Answer: Inputs like labor, land, capital, and natural resources used in the
production of goods and services.
◍ What are factor payments?.
Answer: Payments made to the factors of production, such as wages, rent,
and profit.
◍ What do households do in the Circular-Flow Diagram?.
Answer: Households own the factors of production, sell or rent them to
firms for income, and buy and consume goods and services.
◍ What do firms do in the Circular-Flow Diagram?.
Answer: Firms buy or hire factors of production and use them to produce
goods and services, which they then sell.
◍ When a person exhibits behavior at the anxiety level of the CPI Crisis
Development Model, what is the recommended staff approach?.
Answer: Be supportive.
◍ What is the significance of the government in the Circular-Flow Diagram?.
Answer: The government collects taxes and buys goods and services,
influencing the overall economy.
◍ When a person exhibits behaviors at the defensive level of the CPI Crisis
Development Model, what is the recommended staff approach?.
EXAM PAPER 2026 QUESTIONS WITH
ANSWERS GRADED A+
◍ What does Gross Domestic Product (GDP) measure?.
Answer: Total income of everyone in the economy and total expenditure on
the economy's output of goods and services.
◍ How is GDP related to income and expenditure?.
Answer: Income equals expenditure for the economy as a whole; every
dollar spent by a buyer is a dollar of income for a seller.
◍ What are the components of GDP?.
Answer: Consumption, investment, government spending, and net exports.
◍ All behavior is communication and distress behavior can be how a person
communicates their distress. True/False.
Answer: True
◍ How is GDP corrected for inflation?.
Answer: GDP is adjusted to reflect real GDP, which accounts for changes in
price levels over time.
◍ Does GDP measure society's well-being?.
Answer: No, GDP does not account for factors like income distribution,
environmental quality, or non-market transactions.
◍ What is microeconomics?.
Answer: The study of how households and firms make decisions and interact
in markets.
◍ What is macroeconomics?.
Answer: The study of economy-wide phenomena, including inflation,
, unemployment, and economic growth.
◍ What does the Circular-Flow Diagram illustrate?.
Answer: It depicts GDP as spending, revenue, factor payments, and income
within the economy.
◍ We can use strategies to reduce the likelihood of distress behavior, such as
identifying situations that cause distress, reducing triggers, and helping the
person develop coping strategies. what are these called? a) Reactive
approachesb) Preventive approaches.
Answer: Preventive approaches
◍ What are factors of production?.
Answer: Inputs like labor, land, capital, and natural resources used in the
production of goods and services.
◍ What are factor payments?.
Answer: Payments made to the factors of production, such as wages, rent,
and profit.
◍ What do households do in the Circular-Flow Diagram?.
Answer: Households own the factors of production, sell or rent them to
firms for income, and buy and consume goods and services.
◍ What do firms do in the Circular-Flow Diagram?.
Answer: Firms buy or hire factors of production and use them to produce
goods and services, which they then sell.
◍ When a person exhibits behavior at the anxiety level of the CPI Crisis
Development Model, what is the recommended staff approach?.
Answer: Be supportive.
◍ What is the significance of the government in the Circular-Flow Diagram?.
Answer: The government collects taxes and buys goods and services,
influencing the overall economy.
◍ When a person exhibits behaviors at the defensive level of the CPI Crisis
Development Model, what is the recommended staff approach?.
