introduction to macro economics section 2 Practice Questions Answers Test with Solutions & More Shortcuts

Answer: (b)

The tertiary sector or service sector is the third of the three economic sectors of the three-sector theory.

The others are the secondary sector (manufacturing), and the primary sector (agriculture). Tertiary activities are service-based and give non-tangible value to customers such as the provision of services, trading, etc.

Answer: (a)

Net national product at market price is the market value of the output of final goods and services produced at the current price in one year of a country.

If we subtract the depreciation charges from the gross national product, we get the net national product at market price.

Answer: (d)

A superior good is a product that people demand more of as then their incomes grow. These are products that are generally more expensive and rarer like diamonds and classic cars.

Such a good must possess two economic characteristics: it must be scarce, and, along with that, it must have a high price.

Answer: (c)

A capital gain is a profit that results from a disposition of a capital asset, such as stock, bond or real estate, where the amount realised on the disposition exceeds the purchase price. The gain is the difference between a higher selling price and a lower purchase price.

Capital gains may refer to "investment income" that arises in relation to real assets. In other words, a capital gain represents an appreciation in value accruing over a prescribed period of time on the asset.

Answer: (a)

In economics, the Lorenz curve is a graphical representation of the distribution of income or of wealth. It was developed by Max O.

Lorenz in 1905 for representing inequality of the wealth distribution.

On the graph, a straight diagonal line represents perfect equality of wealth distribution; the Lorenz curve lies beneath it, showing the reality of wealth distribution.