The document contains a series of multiple choice questions that appear to be from an introductory economics course. The questions cover topics such as macroeconomics, demand and supply, elasticity, unemployment, inflation, and international trade. The questions are assessing students' understanding of key economic concepts discussed in the chapters.
1.The tax multiplier associated with a $10B reduction in t.docxelliotkimberlee
1.
The tax multiplier associated with a $10B reduction in taxes is _______ the spending multiplier associated with a $10B increase in government spending because __________
a.
the same quantity as / a tax change will either put more income into or out of savings
b.
smaller than / a tax change also involves a change in savings in the first round of spending
c.
larger than / taxes cause more discretionary income to be spent whether it is a tax increase or a tax decrease
d.
smaller than / the tax multiplier is usually very unstable
2.
Each year the Tax Foundation calculates the day of the year the average income earner has to work in order to pay taxes.
This is known as Tax Freedom Day.
Last year’s date, April 26, was three days later than the previous year’s.
The Tax Foundation says this is because of economic growth leading to higher incomes and higher taxes.
This observation makes sense since our income tax system is progressive and therefore ___________.
This is also consistent with ____________.
a.
takes a higher percent of income, the greater one’s income – how automatic stabilizers work
b.
takes a lower percent of income, the greater one’s income – how automatic stabilizers work
c.
takes a higher percent of income, the greater one’s income – the discretionary tools of fiscal policy
d.
takes a lower percent of income, the greater one’s income – monetary policy
3.
A house is a ______________ asset, and therefore this means that it takes ________ to recover its true value in the marketplace.
a.
liquid
-- much time
b.
non-liquid
-- much time
c.
liquid – very little time
d.
non-liquid
-- very little time
4
."An increase in national income increases aggregate demand more than the initial increase in spending."
The preceding statement describes
a.
microeconomic supply and demand curves.
b.
macroeconomic supply and demand curves.
c.
the spending multiplier.
d.
the money multiplier.
e.
both c) and d) are correct.
5.
If the Fed buys $1,000 worth of bonds and the banking multiplier is 8, then
a.
the reserve ratio is 12.5 percent.
b.
the potential money supply increase is greater than $1,000.
c.
there must also be a government spending increase or the Fed would not be buying the bonds.
d.
all of the above.
e.
both a) and b) are correct.
6.
Both fiscal and monetary policy affect the money supply.
a.
true
b.
false
7.
The Fed is considered "autonomous."
In practice this means the Board of Governors
a.
run for reelection every 4 years.
b.
are more insulated from the wishes of the voters than Congress.
c.
are less insulated from the wishes of the voters than Congress.
d.
can do whatever they please since they have lifetime appointments.
8.
Which of the policy combinations given below would consistently work in the direction of decreasing the rate of growth of the money supply?
a.
Raise the discount rate, lower the reserve requirement and engage in open mar.
1.The tax multiplier associated with a $10B reduction in taxes i.docxhyacinthshackley2629
1.
The tax multiplier associated with a $10B reduction in taxes is _______ the spending multiplier associated with a $10B increase in government spending because __________
a.
the same quantity as / a tax change will either put more income into or out of savings
b.
smaller than / a tax change also involves a change in savings in the first round of spending
c.
larger than / taxes cause more discretionary income to be spent whether it is a tax increase or a tax decrease
d.
smaller than / the tax multiplier is usually very unstable
2.
Each year the Tax Foundation calculates the day of the year the average income earner has to work in order to pay taxes. This is known as Tax Freedom Day. Last year’s date, April 26, was three days later than the previous year’s. The Tax Foundation says this is because of economic growth leading to higher incomes and higher taxes.
This observation makes sense since our income tax system is progressive and therefore ___________. This is also consistent with ____________.
a.
takes a higher percent of income, the greater one’s income – how automatic stabilizers work
b.
takes a lower percent of income, the greater one’s income – how automatic stabilizers work
c.
takes a higher percent of income, the greater one’s income – the discretionary tools of fiscal policy
d.
takes a lower percent of income, the greater one’s income – monetary policy
3.
A house is a ______________ asset, and therefore this means that it takes ________ to recover its true value in the marketplace.
a.
liquid -- much time
b.
non-liquid -- much time
c.
liquid – very little time
d.
non-liquid -- very little time
4
."An increase in national income increases aggregate demand more than the initial increase in spending." The preceding statement describes
a.
microeconomic supply and demand curves.
b.
macroeconomic supply and demand curves.
c.
the spending multiplier.
d.
the money multiplier.
e.
both c) and d) are correct.
5.
If the Fed buys $1,000 worth of bonds and the banking multiplier is 8, then
a.
the reserve ratio is 12.5 percent.
b.
the potential money supply increase is greater than $1,000.
c.
there must also be a government spending increase or the Fed would not be buying the bonds.
d.
all of the above.
e.
both a) and b) are correct.
6.
Both fiscal and monetary policy affect the money supply.
a.
true
b.
false
7.
The Fed is considered "autonomous." In practice this means the Board of Governors
a.
run for reelection every 4 years.
b.
are more insulated from the wishes of the voters than Congress.
c.
are less insulated from the wishes of the voters than Congress.
d.
can do whatever they please since they have lifetime appointments.
8.
Which of the policy combinations given below would consistently work in the direction of decreasing the rate of growth of the money supply?
a.
Raise the discount rate, lower the reserve requirement and engage in open market sales.
b.
Lower the discount rate, lower the res.
South UniversityVirginia Beach CampusECO2071Name ________.docxwilliame8
South University
Virginia Beach Campus
ECO2071
Name: ____________________________________________
Score: ______________
Select the CORRECT answer to each question. Each question is worth 2 points.
1. Economics is the study of how society manages its
a.
limited wants and unlimited resources.
b.
unlimited wants and unlimited resources.
c.
limited wants and limited resources.
d.
unlimited wants and limited resources.
2. The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that
a.
equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources.
b.
equality refers to maximizing benefits from scarce resources and efficiency refers to uniform distribution of those benefits.
c.
equality refers to everyone facing identical tradeoffs and efficiency refers to the opportunity cost of the benefits.
d.
equality refers to the opportunity cost of the benefits and efficiency refers to everyone facing identical tradeoffs.
3. Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Bright should argue that trade can be beneficial
a.
only if it allows us to obtain things that we couldn't make for ourselves.
b.
because it allows specialization, which increases total output.
c.
to us if we can gain and the others involved in the trade lose.
d.
in only a limited number of circumstances because others are typically self-interested.
4. A direct or positive relationship exists between a country's
a.
productivity and its standard of living.
b.
amount of government spending and its productivity.
c.
total population and its average citizen’s income.
d.
rate of population growth and the extent of its trade with other countries.
5. Economists, like mathematicians, physicists, and biologists,
a.
make use of the scientific method.
b.
try to address their subject with a scientist’s objectivity.
c.
devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.
d.
All of the above are correct.
6. Which of the following is an example of a positive, as opposed to normative, statement?
a.
Inflation is more harmful to the economy than unemployment is.
b.
If welfare payments increase, the world will be a better place.
c.
Prices rise when the government prints too much money.
d.
When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency.
7. Which of the following is an example of a normative, as opposed to positive, statement?
a.
Universal health care would be good for U.S. citizens.
b.
An increase in the cigarette tax would cause a decrease in the number of smokers.
c.
A decrease in the minimum wage would decrease unemployment.
d.
A law requiri.
Page 1 of 17 ECON 201 Introduction to Macroeconomics .docxalfred4lewis58146
Page 1 of 17
ECON 201: Introduction to Macroeconomics
Final Exam
December 5, 2011
NAME: _________________________________
Circle your TA’s name: Agustin Brian Meysam
Circle your section time: 9 a.m. 3 p.m.
INSTRUCTIONS:
1. The exam lasts 2 hours.
2. The exam is worth 120 points in total: 45 points for the multiple choice questions (Part A), and
75 points for the six analytical problems (Part B).
3. Write your answers for part A (the multiple choice section) in the blanks below. You won’t
get credit for circled answers in the multiple choice section. There is no penalty to guessing, so
be sure to answer all of them.
4. Place all of your answers for part B in the space provided.
5. You must show your work for part B questions. There is no need to explain your answers for the
multiple choice questions.
6. Calculators are permitted. Books, notes, reference materials, etc. are prohibited.
7. Good luck!
PART A: Multiple Choice Problems. Answer multiple choice questions in the space provided
below. PLEASE USE CAPITAL LETTERS.
1 11 21 31 41
2 12 22 32 42
3 13 23 33 43
4 14 24 34 44
5 15 25 35 45
6 16 26 36
7 17 27 37
8 18 28 38
9 19 29 39
10 20 30 40
MC Q1 Q2 Q3 Q4 Q5 Q6 Total
Page 2 of 17
Part A. Multiple Choice Questions (45 points)
1. Money is
A) backed by gold in Fort Knox.
B) the same as income.
C) the value of all coins and currency in circulation at any time.
D) anything that is generally accepted as a medium of exchange.
2. The development of money as a medium of exchange has facilitated the expansion of trade because
A) holding money increases people's income.
B) no other mediums of exchange are available.
C) money eliminates the "double coincidence of wants" problem.
D) holding money increases people's wealth.
3. The price of bonds and the interest rate are
A) not related.
B) positively related.
C) negatively related.
D) sometimes positively related and other times negatively related, depending on the bond payments.
4. As the interest rate falls, people hold ________ money instead of bonds because the opportunity cost of
holding money has ________.
A) more; fallen
B) more; risen
C) less; fallen
D) less; risen
5. The lecture and readings explain the recent rise in food prices by
A) Subsidies to ethanol
B) Economic growth in China
C) Economic growth in the US
D) Quotas on corn imports
E) A) and B)
F) A) and D)
6. An example of a contractionary monetary policy is
A) an increase in the required reserve ratio.
B) a reduction in the taxes banks pay on their profits.
C) a decrease in the discount rate.
D) the Fed buying government securities in the open market.
7. Which of the following sequence of events follows an expansionary monetary policy?
A) r↓ ⇒ I↓ ⇒ AE↓ ⇒ Y↓.
B) r↑ ⇒ I↑ ⇒ AE↓ ⇒ Y↑.
C) r↑ ⇒ I↓ ⇒ AE↓ ⇒ Y↓.
D) r↓ ⇒ I↑ ⇒ AE↑ ⇒ Y↑.
Page 3 of 17
.
Some of the questions have a image involved. I have attached those .docxboadverna
Some of the questions have a image involved. I have attached those images with the quesiton number as the file name.
1. Which statement is true?
a. Today more workers in the U.S. are members of labor unions than any time in our history
b. Today labor unions are weaker than any time in the last 100 years
c. No major labor union has called a strike since the 1940’s
d. Labor unions are relatively strong in the public (government) sector.
2. Exclusive union strategy involves
a. Increasing the demand for the final product, thereby increasing the demand for labor
b. Restricting the supply of union labor
c. Setting job standards and entry qualifications for members
d. Organizing all workers and bargaining for a wage
e. Negotiating only after a strike has been called
3. An example of an exclusive union would be
a. The Internal Brotherhood of the Teamsters
b. The Communications Workers of America
c. The American Medical Association
4. In which one of these years was labor union membership the highest?
a. 1940
b. 1960
c. 1980
d. 1990
5. Which of the following laws stated that attempts to monopolize conspiracies in restraint of trade, and conspiracies to monopolize were illegal?
a. The Federal Trade Commission Act
b. The Clayton Act
c. The Sherman Antitrust Act
d. All of the Choices
e. None of the Choices
6. Until the passage of the Airline Deregulation Act of 1978, the Civil Aeronautics Board controlled all of the following Except?
a. Fares
b. Assigned routes
c. Profits
d. Entry into the industry
7. The Clayton Act prohibited
A. interlocking directories
B. all forms of monopoly
C. foreign control of US corporations
D. False and deceptive advertising
8. Which statement is true?
a. Microsoft is subject to American antitrust laws but not those of Europe, Asia, or elsewhere
b. Microsoft has never been involved in anti -trust suit
c. The European Commission fined Microsoft over 600 billion for its anticompetitive behavior
d. Microsoft has always gone out of its way to be helpful to its competitors
9. A monopolist operated at the minimum point of her ATC curve
a. Only in the short run
b. Only in the long run
c. In both the short and long run
d. In neither the short nor the long run
10. Which of the following is characteristic of a monopoly?
a. The absence of political power
b. Close substitutes products
c. The ability to make an economic profit in the long run
d. Operating at peak efficiency
11. The firm will charge a price of (image involved)
a. 8
b. 9.65
c. 10.
d. 12.
e. 16
12. Statement I Only natural monopolies are legal in the U.S.
Statement II: Large firms generally operate at peak efficiency
A. Statement I is true and statement II is false
B. Statement II is true and statement I is false
C. Both statements are true
D. Both statements are false
13. The nation’s largest bank has assets over
a. 2.5 billion
b. 25 billion
c. 250 billion
d. 800 billion
e. 1.8 trillion
14. Which statement is true?
A. Our money supply is fixed by law and can be raised b.
1.The tax multiplier associated with a $10B reduction in t.docxelliotkimberlee
1.
The tax multiplier associated with a $10B reduction in taxes is _______ the spending multiplier associated with a $10B increase in government spending because __________
a.
the same quantity as / a tax change will either put more income into or out of savings
b.
smaller than / a tax change also involves a change in savings in the first round of spending
c.
larger than / taxes cause more discretionary income to be spent whether it is a tax increase or a tax decrease
d.
smaller than / the tax multiplier is usually very unstable
2.
Each year the Tax Foundation calculates the day of the year the average income earner has to work in order to pay taxes.
This is known as Tax Freedom Day.
Last year’s date, April 26, was three days later than the previous year’s.
The Tax Foundation says this is because of economic growth leading to higher incomes and higher taxes.
This observation makes sense since our income tax system is progressive and therefore ___________.
This is also consistent with ____________.
a.
takes a higher percent of income, the greater one’s income – how automatic stabilizers work
b.
takes a lower percent of income, the greater one’s income – how automatic stabilizers work
c.
takes a higher percent of income, the greater one’s income – the discretionary tools of fiscal policy
d.
takes a lower percent of income, the greater one’s income – monetary policy
3.
A house is a ______________ asset, and therefore this means that it takes ________ to recover its true value in the marketplace.
a.
liquid
-- much time
b.
non-liquid
-- much time
c.
liquid – very little time
d.
non-liquid
-- very little time
4
."An increase in national income increases aggregate demand more than the initial increase in spending."
The preceding statement describes
a.
microeconomic supply and demand curves.
b.
macroeconomic supply and demand curves.
c.
the spending multiplier.
d.
the money multiplier.
e.
both c) and d) are correct.
5.
If the Fed buys $1,000 worth of bonds and the banking multiplier is 8, then
a.
the reserve ratio is 12.5 percent.
b.
the potential money supply increase is greater than $1,000.
c.
there must also be a government spending increase or the Fed would not be buying the bonds.
d.
all of the above.
e.
both a) and b) are correct.
6.
Both fiscal and monetary policy affect the money supply.
a.
true
b.
false
7.
The Fed is considered "autonomous."
In practice this means the Board of Governors
a.
run for reelection every 4 years.
b.
are more insulated from the wishes of the voters than Congress.
c.
are less insulated from the wishes of the voters than Congress.
d.
can do whatever they please since they have lifetime appointments.
8.
Which of the policy combinations given below would consistently work in the direction of decreasing the rate of growth of the money supply?
a.
Raise the discount rate, lower the reserve requirement and engage in open mar.
1.The tax multiplier associated with a $10B reduction in taxes i.docxhyacinthshackley2629
1.
The tax multiplier associated with a $10B reduction in taxes is _______ the spending multiplier associated with a $10B increase in government spending because __________
a.
the same quantity as / a tax change will either put more income into or out of savings
b.
smaller than / a tax change also involves a change in savings in the first round of spending
c.
larger than / taxes cause more discretionary income to be spent whether it is a tax increase or a tax decrease
d.
smaller than / the tax multiplier is usually very unstable
2.
Each year the Tax Foundation calculates the day of the year the average income earner has to work in order to pay taxes. This is known as Tax Freedom Day. Last year’s date, April 26, was three days later than the previous year’s. The Tax Foundation says this is because of economic growth leading to higher incomes and higher taxes.
This observation makes sense since our income tax system is progressive and therefore ___________. This is also consistent with ____________.
a.
takes a higher percent of income, the greater one’s income – how automatic stabilizers work
b.
takes a lower percent of income, the greater one’s income – how automatic stabilizers work
c.
takes a higher percent of income, the greater one’s income – the discretionary tools of fiscal policy
d.
takes a lower percent of income, the greater one’s income – monetary policy
3.
A house is a ______________ asset, and therefore this means that it takes ________ to recover its true value in the marketplace.
a.
liquid -- much time
b.
non-liquid -- much time
c.
liquid – very little time
d.
non-liquid -- very little time
4
."An increase in national income increases aggregate demand more than the initial increase in spending." The preceding statement describes
a.
microeconomic supply and demand curves.
b.
macroeconomic supply and demand curves.
c.
the spending multiplier.
d.
the money multiplier.
e.
both c) and d) are correct.
5.
If the Fed buys $1,000 worth of bonds and the banking multiplier is 8, then
a.
the reserve ratio is 12.5 percent.
b.
the potential money supply increase is greater than $1,000.
c.
there must also be a government spending increase or the Fed would not be buying the bonds.
d.
all of the above.
e.
both a) and b) are correct.
6.
Both fiscal and monetary policy affect the money supply.
a.
true
b.
false
7.
The Fed is considered "autonomous." In practice this means the Board of Governors
a.
run for reelection every 4 years.
b.
are more insulated from the wishes of the voters than Congress.
c.
are less insulated from the wishes of the voters than Congress.
d.
can do whatever they please since they have lifetime appointments.
8.
Which of the policy combinations given below would consistently work in the direction of decreasing the rate of growth of the money supply?
a.
Raise the discount rate, lower the reserve requirement and engage in open market sales.
b.
Lower the discount rate, lower the res.
South UniversityVirginia Beach CampusECO2071Name ________.docxwilliame8
South University
Virginia Beach Campus
ECO2071
Name: ____________________________________________
Score: ______________
Select the CORRECT answer to each question. Each question is worth 2 points.
1. Economics is the study of how society manages its
a.
limited wants and unlimited resources.
b.
unlimited wants and unlimited resources.
c.
limited wants and limited resources.
d.
unlimited wants and limited resources.
2. The terms equality and efficiency are similar in that they both refer to benefits to society. However they are different in that
a.
equality refers to uniform distribution of those benefits and efficiency refers to maximizing benefits from scarce resources.
b.
equality refers to maximizing benefits from scarce resources and efficiency refers to uniform distribution of those benefits.
c.
equality refers to everyone facing identical tradeoffs and efficiency refers to the opportunity cost of the benefits.
d.
equality refers to the opportunity cost of the benefits and efficiency refers to everyone facing identical tradeoffs.
3. Senator Bright, who understands economic principles, is trying to convince workers in her district that trade with other countries is beneficial. Senator Bright should argue that trade can be beneficial
a.
only if it allows us to obtain things that we couldn't make for ourselves.
b.
because it allows specialization, which increases total output.
c.
to us if we can gain and the others involved in the trade lose.
d.
in only a limited number of circumstances because others are typically self-interested.
4. A direct or positive relationship exists between a country's
a.
productivity and its standard of living.
b.
amount of government spending and its productivity.
c.
total population and its average citizen’s income.
d.
rate of population growth and the extent of its trade with other countries.
5. Economists, like mathematicians, physicists, and biologists,
a.
make use of the scientific method.
b.
try to address their subject with a scientist’s objectivity.
c.
devise theories, collect data, and then analyze these data in an attempt to verify or refute their theories.
d.
All of the above are correct.
6. Which of the following is an example of a positive, as opposed to normative, statement?
a.
Inflation is more harmful to the economy than unemployment is.
b.
If welfare payments increase, the world will be a better place.
c.
Prices rise when the government prints too much money.
d.
When public policies are evaluated, the benefits to the economy of improved equality should be considered more important than the costs of reduced efficiency.
7. Which of the following is an example of a normative, as opposed to positive, statement?
a.
Universal health care would be good for U.S. citizens.
b.
An increase in the cigarette tax would cause a decrease in the number of smokers.
c.
A decrease in the minimum wage would decrease unemployment.
d.
A law requiri.
Page 1 of 17 ECON 201 Introduction to Macroeconomics .docxalfred4lewis58146
Page 1 of 17
ECON 201: Introduction to Macroeconomics
Final Exam
December 5, 2011
NAME: _________________________________
Circle your TA’s name: Agustin Brian Meysam
Circle your section time: 9 a.m. 3 p.m.
INSTRUCTIONS:
1. The exam lasts 2 hours.
2. The exam is worth 120 points in total: 45 points for the multiple choice questions (Part A), and
75 points for the six analytical problems (Part B).
3. Write your answers for part A (the multiple choice section) in the blanks below. You won’t
get credit for circled answers in the multiple choice section. There is no penalty to guessing, so
be sure to answer all of them.
4. Place all of your answers for part B in the space provided.
5. You must show your work for part B questions. There is no need to explain your answers for the
multiple choice questions.
6. Calculators are permitted. Books, notes, reference materials, etc. are prohibited.
7. Good luck!
PART A: Multiple Choice Problems. Answer multiple choice questions in the space provided
below. PLEASE USE CAPITAL LETTERS.
1 11 21 31 41
2 12 22 32 42
3 13 23 33 43
4 14 24 34 44
5 15 25 35 45
6 16 26 36
7 17 27 37
8 18 28 38
9 19 29 39
10 20 30 40
MC Q1 Q2 Q3 Q4 Q5 Q6 Total
Page 2 of 17
Part A. Multiple Choice Questions (45 points)
1. Money is
A) backed by gold in Fort Knox.
B) the same as income.
C) the value of all coins and currency in circulation at any time.
D) anything that is generally accepted as a medium of exchange.
2. The development of money as a medium of exchange has facilitated the expansion of trade because
A) holding money increases people's income.
B) no other mediums of exchange are available.
C) money eliminates the "double coincidence of wants" problem.
D) holding money increases people's wealth.
3. The price of bonds and the interest rate are
A) not related.
B) positively related.
C) negatively related.
D) sometimes positively related and other times negatively related, depending on the bond payments.
4. As the interest rate falls, people hold ________ money instead of bonds because the opportunity cost of
holding money has ________.
A) more; fallen
B) more; risen
C) less; fallen
D) less; risen
5. The lecture and readings explain the recent rise in food prices by
A) Subsidies to ethanol
B) Economic growth in China
C) Economic growth in the US
D) Quotas on corn imports
E) A) and B)
F) A) and D)
6. An example of a contractionary monetary policy is
A) an increase in the required reserve ratio.
B) a reduction in the taxes banks pay on their profits.
C) a decrease in the discount rate.
D) the Fed buying government securities in the open market.
7. Which of the following sequence of events follows an expansionary monetary policy?
A) r↓ ⇒ I↓ ⇒ AE↓ ⇒ Y↓.
B) r↑ ⇒ I↑ ⇒ AE↓ ⇒ Y↑.
C) r↑ ⇒ I↓ ⇒ AE↓ ⇒ Y↓.
D) r↓ ⇒ I↑ ⇒ AE↑ ⇒ Y↑.
Page 3 of 17
.
Some of the questions have a image involved. I have attached those .docxboadverna
Some of the questions have a image involved. I have attached those images with the quesiton number as the file name.
1. Which statement is true?
a. Today more workers in the U.S. are members of labor unions than any time in our history
b. Today labor unions are weaker than any time in the last 100 years
c. No major labor union has called a strike since the 1940’s
d. Labor unions are relatively strong in the public (government) sector.
2. Exclusive union strategy involves
a. Increasing the demand for the final product, thereby increasing the demand for labor
b. Restricting the supply of union labor
c. Setting job standards and entry qualifications for members
d. Organizing all workers and bargaining for a wage
e. Negotiating only after a strike has been called
3. An example of an exclusive union would be
a. The Internal Brotherhood of the Teamsters
b. The Communications Workers of America
c. The American Medical Association
4. In which one of these years was labor union membership the highest?
a. 1940
b. 1960
c. 1980
d. 1990
5. Which of the following laws stated that attempts to monopolize conspiracies in restraint of trade, and conspiracies to monopolize were illegal?
a. The Federal Trade Commission Act
b. The Clayton Act
c. The Sherman Antitrust Act
d. All of the Choices
e. None of the Choices
6. Until the passage of the Airline Deregulation Act of 1978, the Civil Aeronautics Board controlled all of the following Except?
a. Fares
b. Assigned routes
c. Profits
d. Entry into the industry
7. The Clayton Act prohibited
A. interlocking directories
B. all forms of monopoly
C. foreign control of US corporations
D. False and deceptive advertising
8. Which statement is true?
a. Microsoft is subject to American antitrust laws but not those of Europe, Asia, or elsewhere
b. Microsoft has never been involved in anti -trust suit
c. The European Commission fined Microsoft over 600 billion for its anticompetitive behavior
d. Microsoft has always gone out of its way to be helpful to its competitors
9. A monopolist operated at the minimum point of her ATC curve
a. Only in the short run
b. Only in the long run
c. In both the short and long run
d. In neither the short nor the long run
10. Which of the following is characteristic of a monopoly?
a. The absence of political power
b. Close substitutes products
c. The ability to make an economic profit in the long run
d. Operating at peak efficiency
11. The firm will charge a price of (image involved)
a. 8
b. 9.65
c. 10.
d. 12.
e. 16
12. Statement I Only natural monopolies are legal in the U.S.
Statement II: Large firms generally operate at peak efficiency
A. Statement I is true and statement II is false
B. Statement II is true and statement I is false
C. Both statements are true
D. Both statements are false
13. The nation’s largest bank has assets over
a. 2.5 billion
b. 25 billion
c. 250 billion
d. 800 billion
e. 1.8 trillion
14. Which statement is true?
A. Our money supply is fixed by law and can be raised b.
AuthorsPublisherR. Glenn Hubbard and Anthony Patrick.docxikirkton
Authors:
Publisher:
R. Glenn Hubbard and Anthony Patrick O’Brien
Pearson/Prentice Hall
925 N. Spurgeon Street, Santa Ana, CA 92701 Phone: 714-547-9625 Fax: 714-547-5777
04/09
BAM223
PRINCIPLES OF ECONOMICS
F
in
a
l E
xa
m
in
a
ti
o
n
Text: Essentials of Economics
2nd Edition, 2009
ISBN-13: 978-0-13-608623-9
ISBN-10: 013-608623-3
Final Examination
1
Principles of Economics
1) Every society faces economic tradeoffs. This means
a. producing more of one good means less of another good can be produced.
b. not everyone can have enough goods and services to survive.
c. some people live better than others do.
d. society’s output cannot be made available to all.
2) Which of the following statements is false?
a. Tradeoffs do not apply when consumers purchase a product for which there is
excess supply, such as a stock clearance sale.
b. Every individual, no matter how rich or poor, is faced with making tradeoffs.
c. Anytime you have to decide which action to take you are facing an economic
tradeoff.
d. Economics is a social science that studies the tradeoffs we are forced to
make because of scarcity.
3) Which of the following is not an example of an economic tradeoff that a firm
has to make?
a. whether it should produce more of its product.
b. whether it is cheaper to produce with more machines or with more workers.
c. whether or not consumers will buy its products .
d. whether to outsource the production of a good or service
4) How are the fundamental economic decisions determined in Cuba?
a. Primarily, the government decides because Cuba is a centrally planned
economy.
b. These decisions are made by the country’s elders who have had much experi-
ence in answering these questions.
c. Individuals, firms, and the government interact in a market to make these
economic decisions.
d. The United Nations decides because Cuba is a developing economy.
5) Which of the following correctly describes the relationship between economic
efficiency and economic equity?
a. They are both automatically achieved in a free market economy.
b. There is no conflict between the two goals.
c. There is often a trade-off between the two.
d. They always call for opposite outcomes.
Multiple Choice Questions (Enter your answers on the enclosed answer sheet)
2
Final Examination
Principles of Economics
6) Which of the following statements best characterizes the disagreements be-
tween Paul Samuelson and Jagdish Bhagwati in their debate about outsourc-
ing?
a. Their disagreements are grounded in normative economic analysis. They dis-
agree over how to interpret the relevant economic statistics.
b. Their disagreements are grounded in positive economic analysis. They dis-
agree about the relevant economic statistics used in the model.
c. Their disagreements are grounded ...
1. Carolyn spends $2.50 for a hamburger at a restaurant. Which.docxjackiewalcutt
1. Carolyn spends $2.50 for a hamburger at a restaurant. Which of the following would be included in the gross domestic product?
A) The $2.50 Carolyn spends for the hamburger
B) The price the restaurant paid for the meat in the hamburger
C) The price the restaurant paid for the bun
D) all of the above
E) none of the above
2. Most goods and services included in the U.S. gross domestic product are bought by
A) businesses in the United States
B) state, local, and federal governments in the United States
C) people and businesses in other nations
D) consumers in the United states
E) none of the above
3. Which of the following makes an adjustment for both inflation and population change?
A) the consumer price index
B) the unemployment rate
C) real GDP per capita
D) final goods and services
E) all of the above
4. A nation’s standard of living will rise if
A) GDP and population increase at the same rate
B) real GDP per capita increases
C) population increases more than GDP
D) production and consumption decrease
E) all of the above
5. Productivity is
A) a measure of the total amount of goods manufactured.
B) a measure of how much output is produced per unit of input.
C) an unimportant statistic commonly ignored by economists.
D) an important measure of how the U.S. economy is doing.
E) B and D.
6. A nation’s productivity is directly affected by
A) the education of its labor force.
B) the amount of physical capital used.
C) the level of innovation used.
D) all of the above
E) none of the above
7. A farmer produces wheat and sells it for $.50. A miller buys the wheat, grinds it into flour, and sells the flour for $1.00. A baker buys the flour, produces a loaf of bread, and sells it to a consumer for $2.00. The amount added to gross domestic product in this example is
A) 50 cents
B) $1.00
C) $2.00
D) $3.50
E) none of the above
8. In the U.S. economy, the total value of goods and services produced per year is measured by
A) the gross domestic product.
B) the consumer price index.
C) the productivity of labor.
D) the Dow Jones Industrial Average.
E) none of the above
9. Which of the following best summarizes the key elements used to calculate the gross domestic product (GDP) of the United States using the expenditure approach?
A) business inventories, net imports, balance of payments
B) disposable income, consumer spending, housing starts
C) unemployment, factory wages, personal consumption, personal income
D) consumer spending, business investment, government spending, net exports
E) none of the above
10. A recession is said to occur when real gross domestic product (GDP) declines for a period of at least
A) two days
B) two weeks
C) two months
D) two quarters
E) two years
11. The consumer price index (CPI) is used to measure
A) inflation.
B) productivity.
C) gross domestic product.
D) structural unemployment.
E) all of the above
12. Which of the following best describes the difference between GDP and real GDP?
A) unlike GDP, real GDP measures only the val ...
3Final ExaminationBAM 223 Principles of EconomicsM.docxtamicawaysmith
3
Final Examination
BAM 223 Principles of Economics
Multiple Choice Questions (Enter your answers on the enclosed answer sheet)
An economic ________ is a simplified version of some aspect of economic life used to analyze 1.
an economic issue.
variablea.
marketb.
modelc.
trade-off d.
Scenario 1-2
Suppose a hat manufacturer currently sells 2,000 hats per week and makes a profit of
$5,000 per week. The plant owner observes, “Although the last 300 hats we produced and
sold increased our revenue by $1,000 and our costs by $1,100, we are still making an
overall profit of $5,000 per week so I think we’re on the right track. We are producing the
optimal number of hats.”
Refer to Scenario 1-2. Had the firm not produced and sold the last 300 hats, would its profit 2.
be higher or lower, and if so by how much?
Its profit will be $1,100 higher. a.
Its profit will be $1,000 lower. b.
Its profit will be $100 lower.c.
Its profit will be $100 higher. d.
The term market in economics refers to: 3.
a place where money changes hands.a.
a legal institution where exchange can take place.b.
a group of buyers and sellers of a product and the arrangement by which they come c.
together to trade.
an organization which sells goods and services. d.
Scenario 1-3
Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of
$10,000 per week. A manager at the plant observes, “Although the last 400 t-shirts we
produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still
making an overall profit of $10,000 per week so I think we’re on the right track. We are
producing the optimal number of t-shirts.”
Refer to Scenario 1-3. Using marginal analysis terminology, what is another economic term 4.
for the incremental cost of producing the last 400 t-shirts?
marginal costa.
explicit costb.
operating costc.
Any of the above terms are correct.d.
4
Final Examination
BAM 223 Principles of Economics
Suppose the U.S. government encouraged new teachers to take jobs in underperforming 5.
schools by paying the new teachers a $20,000 bonus. These teachers would be exemplifying
the economic idea that:
people respond to economic incentivesa.
people are rationalb.
optimal decisions are made at the marginc.
equity is more important than efficiency d.
Dr. Goldfinger decides to invest in companies which he believes can “improve the 6.
productivity and efficiency” of health care services. How can Dr. Goldfinger strive to achieve
this productive efficiency?
by investing in companies that produce goods and services at the lowest possible costa.
by investing in companies that produce up to the point where the marginal benefit of the b.
last unit produced is equal to the marginal cost of producing it.
by investing in companies that fairly distribute their products and servicesc.
by investing in companies that produce goods and services based on consumer d.
preferences ...
Each brief must include your name, course number, and start ti.docxjacksnathalie
Each brief must include your name, course number, and start time of class. Any deviation from the proper format will result in no points.
Facts: Pinpoint the determinative facts of a case, i.e., those that make a difference in the outcome. Your goal here is to be able to tell the story of the case without missing any pertinent information but also not including too many extraneous facts either. Make sure you have clearly marked the parties’ names and positions in the case (Plaintiff/Defendant or Appellee/Appellant).
Issue: Formulate the main issue or issues in the case in the form of questions, preferably with a yes or no answer, which will help you more clearly state the holding in the next section of the case brief.
Holding: The holding should directly respond to the question in the Issue.
Analysis: This is the most important part of your brief as it describes why the court ruled the way it did. This part of your brief traces the court’s reasoning step by step, so be sure that you record it without gaps in logic as well.
FAILURE TO FOLLOW THE ABOVE RULES WILL RESULT IN NO CREDIT
ECO 301 C Problem Set 3
Deadline: Friday, April 24
1. An economy has a Cobb-Douglas production function. Capital income is
1/4 of real GDP. The depreciation rate is 8% and the saving rate is 5%.
(a) Assume there is neither population growth nor technological progress.
(i) Find the steady-state capital per worker, output per worker, and
consumption per worker.
(ii) Would output Y grow at the state state. If yes, at what rate? What
about capital K?
(b) Assume that the population grows at a rate 0.7% and there is no tech-
nological progress.
(i) Find the steady-state capital per worker, output per worker, and
consumption per worker.
(ii) Would total output Y grow at the state state. If yes, at what rate?
What about capital K?
(c) Assume that rate of population growth is 0.7% and the rate of labor-
augmenting technological progress is 2%.
(i) Find the steady-state capitalper e¤ective worker, outputper e¤ective
worker, and consumption per e¤ective worker.
(ii) Would output per worker Y=L grow at the state state. If yes, at
what rate? What about capital per worker K=L?
(iii) Would output Y grow at the state state. If yes, at what rate? What
about capital K?
(iv) Would real rental rate r grow at the steady state? If yes, at what
rate? What about the real wage w?
(v) Assume the economy is at the steady state. Use growth accounting
to calculate what portion of output growth is due to:
(v-i) an increase in capital
(v-ii) an increase in labor
(v-iii) an increase in total factor productivity
(vi) Assume the economy is at the steady state. You are a policy maker
and your goal is to maximize steady-state consumption per e¤ective worker.
By how much should you change the saving rate in the economy (use a "+"
for an increase and a "�" for a decrease)? Give an example of a policy that
could achieve such a change. Now, assume that your policy is impl ...
11-1
Macroeconomics
Instructor: Jen Dinsmore Hanson
Homework Assignment
Chapter 11
Multiple Choice Questions
1. Say's law
A. was a basic pillar of classical economics.
B. was a basic pillar of Keynesian economics.
C. was formulated during the Great Depression.
D. proves that we can never have full employment.
2. Which question did John Maynard Keynes pose for the classical economists?
A. What if their policies led to inflation?
B. What if savings and investment were not equal?
C. What if government intervention did not cure a recession?
D. John Maynard Keynes posed none of these questions
3. At equilibrium GDP
A. Savings = investment, but aggregate demand does not equal aggregate supply.
B. Savings = investment and aggregate demand = aggregate supply.
C. Savings does not equal investment and aggregate demand does not equal aggregate supply.
D. Savings does not equal investment, but aggregate demand = aggregate supply.
4. Laissez-faire economics was advocated by
A. both Keynes and the classicals.
B. neither Keynes nor the classicals.
C. the classicals, but not by Keynes.
D. Keynes, but not by the classicals.
5. When the average price level in the United States, relative to the average price levels in
other countries, rises, this tends to
A. raise imports and exports.
B. lower imports and exports.
C. raise imports and lower exports.
D. lower imports and raise exports.
6. According to the classicals, our economy can produce beyond the full employment output
A. only in the short run.
B. only in the long run.
C. in both the short run and the long run.
D. in neither the short run nor the long run.
11-2
7. Keynes and the classicals used _____ aggregate demand and supply apparatuses and came
to _____ conclusions.
A. the same; the same
B. different; different
C. the same; different
D. different; the same
8. John Maynard Keynes
A. agreed with classical writers that strong automatic pressures drive market economies to full
employment.
B. focused on attaining the long-run macroeconomic goal of high, but stable economic
growth.
C. argued that a market economy might become stuck in a short-run equilibrium in which
substantial capital and labor lay idle.
D. argued that short-run equilibrium occurs only at full employment.
9. The notion that everything the economy produces is purchased
A. sums up Say's law.
B. can be restated as "demand creates its own supply."
C. refers to the real balance effect.
D. was a critical assumption Keynes made in explaining the worldwide depression of the
1930s.
10. If the economy is in the vertical portion of the AS curve, what will be the effect of an
increase in the price level on output produced?
A. Output will increase at a very rapid rate
B. Output will not change
C. Output will only slightly increase
D. Output change cannot be predicted from information given
11. The wealth or.
Question 11. 1) _________ economies are the most effective at pr.docxIRESH3
Question 1
1. 1) _________ economies are the most effective at promoting economic growth.
a.
Command
b.
Closed
c.
Open
d.
Inflationary
3 points
Question 2
1. 1) Limiting the immigration of highly educated professionals hurts U.S. economic growth because
a.
it restricts the supply of high human capital workers and the new ideas they could potentially generate.
b.
it restricts the knowledge base of the workforce.
c.
immigrants always cost less to hire than native workers do.
d.
both a. and b.
3 points
Question 3
1. 1) Economic growth is positively related to all of the following except
a.
import tariffs.
b.
the rate of investment.
c.
the rate of saving.
d.
the growth of technology.
3 points
Question 4
1. 1) Supply-side inflation can be caused by a continual
a.
increase in aggregate demand while aggregate supply remains unchanged.
b.
decrease in aggregate supply while aggregate demand remains unchanged.
c.
increase in aggregate supply while aggregate demand remains unchanged.
d.
decrease in aggregate demand while aggregate supply significantly decreases.
3 points
Question 5
1. 1) The aggregate demand curve would shift to the right as a result of
a.
a drop in the foreign exchange value of a dollar.
b.
tax increases.
c.
a drop in the price level.
d.
a decrease in the amount of money in circulation.
3 points
Question 6
1. 1) The total of all planned real expenditures in the economy is
a.
aggregate GDP.
b.
aggregate consumption.
c.
aggregate spending.
d.
aggregate demand.
3 points
Question 7
1. 1) Consider this statement: “Persistent inflation in a growing economy is possible only if the aggregate demand curve shifts rightward over time at a faster pace than the rightward progression of the long-run aggregate supply curve.” This statement is describing:
a.
demand-side inflation.
b.
supply-side inflation.
c.
demand- and supply-side inflation.
d.
neither demand- nor supply-side inflation.
3 points
Question 8
1. 1) Which of the following best exemplifies Say’s Law?
a.
The more you consume the less additional satisfaction you receive from additional consumption of the good.
b.
A decrease in the price of a good leads to larger amounts of the good being purchased.
c.
The production of a $4000 Plasma TV set creates demand for other goods and services valued at $4000.
d.
Increases in labor eventually lead to smaller and smaller increases in output.
3 points
Question 9
1. 1) All of the following will shift the short-run aggregate supply curve and long-run aggregate supply curve except for
a.
a depletion of raw materials.
b.
a temporary change in raw materials.
c.
decreased competition.
d.
increased education and training for the labor force.
3 points
Question 10
1. 1) The LRAS curve is vertical because unemployment is at its ________________.
a.
natural rate
b.
frictional rate
c.
cyclical rate
d.
structural rate
3 points
Question 11
1. 1) Which of the following facto ...
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[Note: This is a partial preview. To download this presentation, visit:
https://www.oeconsulting.com.sg/training-presentations]
Sustainability has become an increasingly critical topic as the world recognizes the need to protect our planet and its resources for future generations. Sustainability means meeting our current needs without compromising the ability of future generations to meet theirs. It involves long-term planning and consideration of the consequences of our actions. The goal is to create strategies that ensure the long-term viability of People, Planet, and Profit.
Leading companies such as Nike, Toyota, and Siemens are prioritizing sustainable innovation in their business models, setting an example for others to follow. In this Sustainability training presentation, you will learn key concepts, principles, and practices of sustainability applicable across industries. This training aims to create awareness and educate employees, senior executives, consultants, and other key stakeholders, including investors, policymakers, and supply chain partners, on the importance and implementation of sustainability.
LEARNING OBJECTIVES
1. Develop a comprehensive understanding of the fundamental principles and concepts that form the foundation of sustainability within corporate environments.
2. Explore the sustainability implementation model, focusing on effective measures and reporting strategies to track and communicate sustainability efforts.
3. Identify and define best practices and critical success factors essential for achieving sustainability goals within organizations.
CONTENTS
1. Introduction and Key Concepts of Sustainability
2. Principles and Practices of Sustainability
3. Measures and Reporting in Sustainability
4. Sustainability Implementation & Best Practices
To download the complete presentation, visit: https://www.oeconsulting.com.sg/training-presentations
AuthorsPublisherR. Glenn Hubbard and Anthony Patrick.docxikirkton
Authors:
Publisher:
R. Glenn Hubbard and Anthony Patrick O’Brien
Pearson/Prentice Hall
925 N. Spurgeon Street, Santa Ana, CA 92701 Phone: 714-547-9625 Fax: 714-547-5777
04/09
BAM223
PRINCIPLES OF ECONOMICS
F
in
a
l E
xa
m
in
a
ti
o
n
Text: Essentials of Economics
2nd Edition, 2009
ISBN-13: 978-0-13-608623-9
ISBN-10: 013-608623-3
Final Examination
1
Principles of Economics
1) Every society faces economic tradeoffs. This means
a. producing more of one good means less of another good can be produced.
b. not everyone can have enough goods and services to survive.
c. some people live better than others do.
d. society’s output cannot be made available to all.
2) Which of the following statements is false?
a. Tradeoffs do not apply when consumers purchase a product for which there is
excess supply, such as a stock clearance sale.
b. Every individual, no matter how rich or poor, is faced with making tradeoffs.
c. Anytime you have to decide which action to take you are facing an economic
tradeoff.
d. Economics is a social science that studies the tradeoffs we are forced to
make because of scarcity.
3) Which of the following is not an example of an economic tradeoff that a firm
has to make?
a. whether it should produce more of its product.
b. whether it is cheaper to produce with more machines or with more workers.
c. whether or not consumers will buy its products .
d. whether to outsource the production of a good or service
4) How are the fundamental economic decisions determined in Cuba?
a. Primarily, the government decides because Cuba is a centrally planned
economy.
b. These decisions are made by the country’s elders who have had much experi-
ence in answering these questions.
c. Individuals, firms, and the government interact in a market to make these
economic decisions.
d. The United Nations decides because Cuba is a developing economy.
5) Which of the following correctly describes the relationship between economic
efficiency and economic equity?
a. They are both automatically achieved in a free market economy.
b. There is no conflict between the two goals.
c. There is often a trade-off between the two.
d. They always call for opposite outcomes.
Multiple Choice Questions (Enter your answers on the enclosed answer sheet)
2
Final Examination
Principles of Economics
6) Which of the following statements best characterizes the disagreements be-
tween Paul Samuelson and Jagdish Bhagwati in their debate about outsourc-
ing?
a. Their disagreements are grounded in normative economic analysis. They dis-
agree over how to interpret the relevant economic statistics.
b. Their disagreements are grounded in positive economic analysis. They dis-
agree about the relevant economic statistics used in the model.
c. Their disagreements are grounded ...
1. Carolyn spends $2.50 for a hamburger at a restaurant. Which.docxjackiewalcutt
1. Carolyn spends $2.50 for a hamburger at a restaurant. Which of the following would be included in the gross domestic product?
A) The $2.50 Carolyn spends for the hamburger
B) The price the restaurant paid for the meat in the hamburger
C) The price the restaurant paid for the bun
D) all of the above
E) none of the above
2. Most goods and services included in the U.S. gross domestic product are bought by
A) businesses in the United States
B) state, local, and federal governments in the United States
C) people and businesses in other nations
D) consumers in the United states
E) none of the above
3. Which of the following makes an adjustment for both inflation and population change?
A) the consumer price index
B) the unemployment rate
C) real GDP per capita
D) final goods and services
E) all of the above
4. A nation’s standard of living will rise if
A) GDP and population increase at the same rate
B) real GDP per capita increases
C) population increases more than GDP
D) production and consumption decrease
E) all of the above
5. Productivity is
A) a measure of the total amount of goods manufactured.
B) a measure of how much output is produced per unit of input.
C) an unimportant statistic commonly ignored by economists.
D) an important measure of how the U.S. economy is doing.
E) B and D.
6. A nation’s productivity is directly affected by
A) the education of its labor force.
B) the amount of physical capital used.
C) the level of innovation used.
D) all of the above
E) none of the above
7. A farmer produces wheat and sells it for $.50. A miller buys the wheat, grinds it into flour, and sells the flour for $1.00. A baker buys the flour, produces a loaf of bread, and sells it to a consumer for $2.00. The amount added to gross domestic product in this example is
A) 50 cents
B) $1.00
C) $2.00
D) $3.50
E) none of the above
8. In the U.S. economy, the total value of goods and services produced per year is measured by
A) the gross domestic product.
B) the consumer price index.
C) the productivity of labor.
D) the Dow Jones Industrial Average.
E) none of the above
9. Which of the following best summarizes the key elements used to calculate the gross domestic product (GDP) of the United States using the expenditure approach?
A) business inventories, net imports, balance of payments
B) disposable income, consumer spending, housing starts
C) unemployment, factory wages, personal consumption, personal income
D) consumer spending, business investment, government spending, net exports
E) none of the above
10. A recession is said to occur when real gross domestic product (GDP) declines for a period of at least
A) two days
B) two weeks
C) two months
D) two quarters
E) two years
11. The consumer price index (CPI) is used to measure
A) inflation.
B) productivity.
C) gross domestic product.
D) structural unemployment.
E) all of the above
12. Which of the following best describes the difference between GDP and real GDP?
A) unlike GDP, real GDP measures only the val ...
3Final ExaminationBAM 223 Principles of EconomicsM.docxtamicawaysmith
3
Final Examination
BAM 223 Principles of Economics
Multiple Choice Questions (Enter your answers on the enclosed answer sheet)
An economic ________ is a simplified version of some aspect of economic life used to analyze 1.
an economic issue.
variablea.
marketb.
modelc.
trade-off d.
Scenario 1-2
Suppose a hat manufacturer currently sells 2,000 hats per week and makes a profit of
$5,000 per week. The plant owner observes, “Although the last 300 hats we produced and
sold increased our revenue by $1,000 and our costs by $1,100, we are still making an
overall profit of $5,000 per week so I think we’re on the right track. We are producing the
optimal number of hats.”
Refer to Scenario 1-2. Had the firm not produced and sold the last 300 hats, would its profit 2.
be higher or lower, and if so by how much?
Its profit will be $1,100 higher. a.
Its profit will be $1,000 lower. b.
Its profit will be $100 lower.c.
Its profit will be $100 higher. d.
The term market in economics refers to: 3.
a place where money changes hands.a.
a legal institution where exchange can take place.b.
a group of buyers and sellers of a product and the arrangement by which they come c.
together to trade.
an organization which sells goods and services. d.
Scenario 1-3
Suppose a t-shirt manufacturer currently sells 5,000 t-shirts per week and makes a profit of
$10,000 per week. A manager at the plant observes, “Although the last 400 t-shirts we
produced and sold increased our revenue by $4,000 and our costs by $4,800, we are still
making an overall profit of $10,000 per week so I think we’re on the right track. We are
producing the optimal number of t-shirts.”
Refer to Scenario 1-3. Using marginal analysis terminology, what is another economic term 4.
for the incremental cost of producing the last 400 t-shirts?
marginal costa.
explicit costb.
operating costc.
Any of the above terms are correct.d.
4
Final Examination
BAM 223 Principles of Economics
Suppose the U.S. government encouraged new teachers to take jobs in underperforming 5.
schools by paying the new teachers a $20,000 bonus. These teachers would be exemplifying
the economic idea that:
people respond to economic incentivesa.
people are rationalb.
optimal decisions are made at the marginc.
equity is more important than efficiency d.
Dr. Goldfinger decides to invest in companies which he believes can “improve the 6.
productivity and efficiency” of health care services. How can Dr. Goldfinger strive to achieve
this productive efficiency?
by investing in companies that produce goods and services at the lowest possible costa.
by investing in companies that produce up to the point where the marginal benefit of the b.
last unit produced is equal to the marginal cost of producing it.
by investing in companies that fairly distribute their products and servicesc.
by investing in companies that produce goods and services based on consumer d.
preferences ...
Each brief must include your name, course number, and start ti.docxjacksnathalie
Each brief must include your name, course number, and start time of class. Any deviation from the proper format will result in no points.
Facts: Pinpoint the determinative facts of a case, i.e., those that make a difference in the outcome. Your goal here is to be able to tell the story of the case without missing any pertinent information but also not including too many extraneous facts either. Make sure you have clearly marked the parties’ names and positions in the case (Plaintiff/Defendant or Appellee/Appellant).
Issue: Formulate the main issue or issues in the case in the form of questions, preferably with a yes or no answer, which will help you more clearly state the holding in the next section of the case brief.
Holding: The holding should directly respond to the question in the Issue.
Analysis: This is the most important part of your brief as it describes why the court ruled the way it did. This part of your brief traces the court’s reasoning step by step, so be sure that you record it without gaps in logic as well.
FAILURE TO FOLLOW THE ABOVE RULES WILL RESULT IN NO CREDIT
ECO 301 C Problem Set 3
Deadline: Friday, April 24
1. An economy has a Cobb-Douglas production function. Capital income is
1/4 of real GDP. The depreciation rate is 8% and the saving rate is 5%.
(a) Assume there is neither population growth nor technological progress.
(i) Find the steady-state capital per worker, output per worker, and
consumption per worker.
(ii) Would output Y grow at the state state. If yes, at what rate? What
about capital K?
(b) Assume that the population grows at a rate 0.7% and there is no tech-
nological progress.
(i) Find the steady-state capital per worker, output per worker, and
consumption per worker.
(ii) Would total output Y grow at the state state. If yes, at what rate?
What about capital K?
(c) Assume that rate of population growth is 0.7% and the rate of labor-
augmenting technological progress is 2%.
(i) Find the steady-state capitalper e¤ective worker, outputper e¤ective
worker, and consumption per e¤ective worker.
(ii) Would output per worker Y=L grow at the state state. If yes, at
what rate? What about capital per worker K=L?
(iii) Would output Y grow at the state state. If yes, at what rate? What
about capital K?
(iv) Would real rental rate r grow at the steady state? If yes, at what
rate? What about the real wage w?
(v) Assume the economy is at the steady state. Use growth accounting
to calculate what portion of output growth is due to:
(v-i) an increase in capital
(v-ii) an increase in labor
(v-iii) an increase in total factor productivity
(vi) Assume the economy is at the steady state. You are a policy maker
and your goal is to maximize steady-state consumption per e¤ective worker.
By how much should you change the saving rate in the economy (use a "+"
for an increase and a "�" for a decrease)? Give an example of a policy that
could achieve such a change. Now, assume that your policy is impl ...
11-1
Macroeconomics
Instructor: Jen Dinsmore Hanson
Homework Assignment
Chapter 11
Multiple Choice Questions
1. Say's law
A. was a basic pillar of classical economics.
B. was a basic pillar of Keynesian economics.
C. was formulated during the Great Depression.
D. proves that we can never have full employment.
2. Which question did John Maynard Keynes pose for the classical economists?
A. What if their policies led to inflation?
B. What if savings and investment were not equal?
C. What if government intervention did not cure a recession?
D. John Maynard Keynes posed none of these questions
3. At equilibrium GDP
A. Savings = investment, but aggregate demand does not equal aggregate supply.
B. Savings = investment and aggregate demand = aggregate supply.
C. Savings does not equal investment and aggregate demand does not equal aggregate supply.
D. Savings does not equal investment, but aggregate demand = aggregate supply.
4. Laissez-faire economics was advocated by
A. both Keynes and the classicals.
B. neither Keynes nor the classicals.
C. the classicals, but not by Keynes.
D. Keynes, but not by the classicals.
5. When the average price level in the United States, relative to the average price levels in
other countries, rises, this tends to
A. raise imports and exports.
B. lower imports and exports.
C. raise imports and lower exports.
D. lower imports and raise exports.
6. According to the classicals, our economy can produce beyond the full employment output
A. only in the short run.
B. only in the long run.
C. in both the short run and the long run.
D. in neither the short run nor the long run.
11-2
7. Keynes and the classicals used _____ aggregate demand and supply apparatuses and came
to _____ conclusions.
A. the same; the same
B. different; different
C. the same; different
D. different; the same
8. John Maynard Keynes
A. agreed with classical writers that strong automatic pressures drive market economies to full
employment.
B. focused on attaining the long-run macroeconomic goal of high, but stable economic
growth.
C. argued that a market economy might become stuck in a short-run equilibrium in which
substantial capital and labor lay idle.
D. argued that short-run equilibrium occurs only at full employment.
9. The notion that everything the economy produces is purchased
A. sums up Say's law.
B. can be restated as "demand creates its own supply."
C. refers to the real balance effect.
D. was a critical assumption Keynes made in explaining the worldwide depression of the
1930s.
10. If the economy is in the vertical portion of the AS curve, what will be the effect of an
increase in the price level on output produced?
A. Output will increase at a very rapid rate
B. Output will not change
C. Output will only slightly increase
D. Output change cannot be predicted from information given
11. The wealth or.
Question 11. 1) _________ economies are the most effective at pr.docxIRESH3
Question 1
1. 1) _________ economies are the most effective at promoting economic growth.
a.
Command
b.
Closed
c.
Open
d.
Inflationary
3 points
Question 2
1. 1) Limiting the immigration of highly educated professionals hurts U.S. economic growth because
a.
it restricts the supply of high human capital workers and the new ideas they could potentially generate.
b.
it restricts the knowledge base of the workforce.
c.
immigrants always cost less to hire than native workers do.
d.
both a. and b.
3 points
Question 3
1. 1) Economic growth is positively related to all of the following except
a.
import tariffs.
b.
the rate of investment.
c.
the rate of saving.
d.
the growth of technology.
3 points
Question 4
1. 1) Supply-side inflation can be caused by a continual
a.
increase in aggregate demand while aggregate supply remains unchanged.
b.
decrease in aggregate supply while aggregate demand remains unchanged.
c.
increase in aggregate supply while aggregate demand remains unchanged.
d.
decrease in aggregate demand while aggregate supply significantly decreases.
3 points
Question 5
1. 1) The aggregate demand curve would shift to the right as a result of
a.
a drop in the foreign exchange value of a dollar.
b.
tax increases.
c.
a drop in the price level.
d.
a decrease in the amount of money in circulation.
3 points
Question 6
1. 1) The total of all planned real expenditures in the economy is
a.
aggregate GDP.
b.
aggregate consumption.
c.
aggregate spending.
d.
aggregate demand.
3 points
Question 7
1. 1) Consider this statement: “Persistent inflation in a growing economy is possible only if the aggregate demand curve shifts rightward over time at a faster pace than the rightward progression of the long-run aggregate supply curve.” This statement is describing:
a.
demand-side inflation.
b.
supply-side inflation.
c.
demand- and supply-side inflation.
d.
neither demand- nor supply-side inflation.
3 points
Question 8
1. 1) Which of the following best exemplifies Say’s Law?
a.
The more you consume the less additional satisfaction you receive from additional consumption of the good.
b.
A decrease in the price of a good leads to larger amounts of the good being purchased.
c.
The production of a $4000 Plasma TV set creates demand for other goods and services valued at $4000.
d.
Increases in labor eventually lead to smaller and smaller increases in output.
3 points
Question 9
1. 1) All of the following will shift the short-run aggregate supply curve and long-run aggregate supply curve except for
a.
a depletion of raw materials.
b.
a temporary change in raw materials.
c.
decreased competition.
d.
increased education and training for the labor force.
3 points
Question 10
1. 1) The LRAS curve is vertical because unemployment is at its ________________.
a.
natural rate
b.
frictional rate
c.
cyclical rate
d.
structural rate
3 points
Question 11
1. 1) Which of the following facto ...
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3. c
This file is copyright 2021, Rice University. All Rights Reserved.
Prior to this course, which of the following is closest to the concept you
most associated with the word "economics"?
A. Finance or the stock market
B. Work or job opportunities
C. The overall "health" of the country
D. Producing and purchasing things
E. Trade and international relations
Ch1Q1
4. c
This file is copyright 2021, Rice University. All Rights Reserved.
Consider the circular flow diagram. In your opinion, if a recession
lowered payments from households to firms, what would be the effect
on wages?
A. There would be no effect
B. They would go down
C. They would go up
D. There's no way to tell
Ch1Q2
5. c
This file is copyright 2021, Rice University. All Rights Reserved.
In which type of economy would you rather live?
A. Command Economy
B. Market Economy
C. Traditional Economy
Ch1Q3
6. c
This file is copyright 2021, Rice University. All Rights Reserved.
The study of monetary and fiscal policy are examples of:
A. Macroeconomics
B. Microeconomics
Ch1Q4
7. c
This file is copyright 2021, Rice University. All Rights Reserved.
The study of unemployment is an example of:
A. Macroeconomics
B. Microeconomics
Ch1Q5
8. c
This file is copyright 2021, Rice University. All Rights Reserved.
The study of the housing market in Houston is an example of:
A. Macroeconomics
B. Microeconomics
Ch1Q6
10. c
This file is copyright 2021, Rice University. All Rights Reserved.
Which of the following will shift a production-possibilities frontier to the
right?
A. Wants become greater.
B. Either resources increase or technology improves.
C. Unemployment and underemployment are eliminated.
D. People demand more of one good and less of the other.
E. Opportunity costs rise.
Ch2Q1
11. c
This file is copyright 2021, Rice University. All Rights Reserved.
Which of the following terms indicates all the combinations of good A
and good B one can afford given the amount of money they have to
spend and the price of the two goods?
A. Budget Constraint
B. Production Possibilities Frontier (PPF)
C. Allocative Efficiency
D. Opportunity Costs
Ch2Q2
12. c
This file is copyright 2021, Rice University. All Rights Reserved.
Company J produces permanent markers. They decide to increase
their production from 30,000 to 40,000 permanent markers. With this
increase in the number of permanent markers they produce, they incur
greater production expenses and intangible costs. This demonstrates:
A. The Law of Diminishing Returns
B. The Law of Productivity
C. The Law of Increasing Opportunity Cost
D. The Law of Increasing Production
Ch2Q3
13. c
This file is copyright 2021, Rice University. All Rights Reserved.
What does the slope of the production possibilities frontier (PPF) show
us?
A. The Law of Productivity
B. The Opportunity Cost
C. Utility
D. Sunk Costs
Ch2Q4
15. Ch3Q1
The price of a good rises and so does the quantity sold. These observations are
consistent with:
A. An upward shift of the supply curve.
B. A downward shift of the supply curve.
C. An upward shift of the demand curve.
D. A downward shift of the demand curve.
This file is copyright 2021, Rice University. All Rights Reserved.
16. Ch3Q2
The demand curve is given by P=100 -Q and the supply curve by P=20+4 Q. The
competitive equilibrium Quantity is:
A. Q=80
B. Q=44
C. Q=28
D. Q=20
E. Q=16
This file is copyright 2021, Rice University. All Rights Reserved.
17. Ch3Q3
Suppose the price of raspberries is $10 per pound, but then falls to $8
per pound. The law of demand states that:
A. Demand will rise
B. Demand will fall
C. Quantity demanded will rise
D. Quantity demanded will fall
This file is copyright 2021, Rice University. All Rights Reserved.
18. c
This file is copyright 2021, Rice University. All Rights Reserved.
Suppose Noel has three hours of unscheduled time one evening, and is
deciding how to spend it. They rank three choices: (1) Watching a
movie, (2) Attending a basketball game, (3) Working on a paper.
Assume that each activity will take the entire three hours. What is the
opportunity cost of watching a movie?:
A. Attending a basketball game and working on a paper
B. Either attending a basketball game or working on a paper
C. Attending a basketball game
D. Working on a paper
Ch3Q4
19. c
This file is copyright 2021, Rice University. All Rights Reserved.
If both the demand curve and supply curve move to the left, we can
predict:
A. price will fall, but we cannot predict quantity.
B. price will rise, but we cannot predict quantity.
C. quantity will rise, but we cannot predict price.
D. quantity will fall, but we cannot predict price.
Ch3Q5
20. c
This file is copyright 2021, Rice University. All Rights Reserved.
What is the best example of a complementary good to hamburgers?
A. Fried chicken
B. Beef
C. French fries
D. Donuts
Ch3Q6
21. c
This file is copyright 2021, Rice University. All Rights Reserved.
An increase in the price of chicken feed shifts the supply curve for eggs
to the left and moves buyers along the demand curve. In the jargon of
economics, we have had a change in:
A. supply and a change in quantity demanded.
B. supply and a change in demand.
C. quantity supplied and a change in quantity demanded.
D. quantity supplied and a change in demand.
Ch3Q7
22. c
This file is copyright 2021, Rice University. All Rights Reserved.
Suppose that both the price of gasoline and the amount of gasoline
sold decline. Which of the following would account for this?
A. A shift left of the demand curve, but no change in the supply curve
B. A shift right of the demand curve, but no change in the supply curve
C. A shift left of the supply curve, but no change in the demand curve
D. A shift right of the supply curve, but no change in the demand curve
Ch3Q8
23. c
This file is copyright 2021, Rice University. All Rights Reserved.
When more buyers enter a market, prices tend to :
A. Decrease
B. Remain the Same
C. Increase
Ch3Q9
25. c
This file is copyright 2021, Rice University. All Rights Reserved.
If the quantity of loans given and received goes down, what can we
assume about the preceding changes in the financial market?
A. rising demand
B. falling demand
C. rising supply
D. falling supply
Ch4Q1
26. c
This file is copyright 2021, Rice University. All Rights Reserved.
What will a price ceiling usually shift?
A. Supply
B. Demand
C. Both
D. Neither
Ch4Q2
27. c
This file is copyright 2021, Rice University. All Rights Reserved.
What will shift the demand curve for high-skill labor to the right:
A. A reduction in companies
B. Increased input costs
C. The technology substitute
D. The technology complement
Ch4Q3
28. c
This file is copyright 2021, Rice University. All Rights Reserved.
At equilibrium:
A. Quantity supplied and quantity demanded are equal
B. Supply and demand are equal
C. There is an excess supply of labor in the market
D. There is an excess demand or shortage in the market
Ch4Q4
30. c
This file is copyright 2021, Rice University. All Rights Reserved.
Terri's Tacos finds that no matter how much it sells, its marginal
revenue is always $3.50. This constant marginal revenue tells us that
the elasticity of its demand curve is:
A. Infinity
B. 3.5
C. 1
D. 0
Ch5Q1
31. c
This file is copyright 2021, Rice University. All Rights Reserved.
An economic consultant tells their client that their product is an inferior
good. By this, what do they most likely mean about the product's
elasticity?
A. It has an income elasticity greater than zero.
B. It has an income elasticity less than zero
C. It has a price elasticity of supply greater than one.
D. It as a price elasticity of supply less than one.
Ch5Q2
32. c
This file is copyright 2021, Rice University. All Rights Reserved.
If demand is price elastic, then:
A. a rise in price will raise total revenue.
B. a fall in price will raise total revenue.
C. a fall in price will lower the quantity demanded.
D. a rise in price won't have any effect on total revenues.
Ch5Q3
33. c
This file is copyright 2021, Rice University. All Rights Reserved.
It is reasonable to expect the cross price elasticity of demand for tennis
rackets and tennis balls to be positive:
A. True
B. False
Ch5Q4
35. c
This file is copyright 2021, Rice University. All Rights Reserved.
Real GDP measures:
A. current output at current prices.
B. current output at base year prices.
C. base year output at current prices.
D. base year output at current exchange rates.
Ch6Q1
36. c
This file is copyright 2021, Rice University. All Rights Reserved.
What will a rise in population do to per capita GDP?
A. It will raise it.
B. It will lower it.
C. It will either raise or lower it.
D. It will have no effect.
Ch6Q2
37. c
This file is copyright 2021, Rice University. All Rights Reserved.
If the analysts at the Federal Reserve are verifying the impact of
inflation on GDP, which type of GDP are they likely calculating?
A. Potential GDP
B. Nominal GDP
C. Real GDP
D. Forecasted GDP
Ch6Q3
39. c
This file is copyright 2021, Rice University. All Rights Reserved.
Using the formula for GDP increase calculations below, answer the
following question:
Formula: GDP at starting date × (1 + growth rate of GDP)years = GDP
at end date
Country A has a starting GDP of 300 and grows at a rate of 4%.
Country B has a starting GDP of 350 and grows at a rate of 2%.
After 10 years, which country would have a higher GDP?
A. Country A
B. Country B
Ch7Q1
40. c
This file is copyright 2021, Rice University. All Rights Reserved.
After an election, a new political administration takes power in a low-
income country with little infrastructure and educational institutions. The
prime minister and chief economic advisors believe that human capital
deepening is key to economic growth. With this idea in mind, if they
wanted to achieve the highest possible level of economic growth in 10
years, what should they do?
A. Invest in infrastructure.
B. Build schools and universities
C. Send young adults to elite foreign schools.
D. Encourage foreign investment into their country.
Ch7Q2
41. c
This file is copyright 2021, Rice University. All Rights Reserved.
After an election, a new political administration takes power in a low-
income country with little infrastructure and educational institutions. The
prime minister and chief economic advisors believe that physical capital
deepening is key to economic growth. With this idea in mind, if they
wanted to achieve the highest possible level of economic growth in 15
years, what should they do?
A. Invest in infrastructure.
B. Build schools and universities
C. Send young adults to elite foreign schools.
D. Encourage foreign investment into their country.
Ch7Q3
43. c
This file is copyright 2021, Rice University. All Rights Reserved.
If the Department of Labor determines that structural unemployment is
rising quickly, and the department wants to reduce the level, in what
type of programs would it be most likely to invest?
A. Grant programs to states for road and energy infrastructure construction.
B. Government sponsored research and development projects to spur
innovation
C. Increased unemployment benefits
D. Grant programs to colleges to develop technology training programs
Ch8Q1
44. c
This file is copyright 2021, Rice University. All Rights Reserved.
Why would a company that went through a financial downturn decide to
lay off some workers rather than introduce a small wage reduction
across the company?
A. Wage reductions are an unfair practice and would invite scrutiny from the
Department of Labor or related organizations.
B. The company would have a hard time hiring new workers after it cut the
wages.
C. After a wage reduction, the best workers would depart for better options,
leaving the company with less productive workers.
D. Longer term, the laid off workers would gain a better salary at their new
employers because they hadn’t reduced their ending wage.
Ch8Q2
45. c
This file is copyright 2021, Rice University. All Rights Reserved.
Overall, which of the following countries is most likely in a better
economic position?
A. A country with low unemployment and a relatively high number of people
out of the labor force.
B. A country with a relatively high unemployment and a low number of people
out of the labor force?
Ch8Q3
47. c
This file is copyright 2021, Rice University. All Rights Reserved.
What is a key assumption of the consumer price index?
A. It assumes that people will always switch to products with reduced prices.
B. It assumes that new products will fail.
C. It assumes that purchase quantity of a product remains consistent month-to-
month.
D. It assumes that price increases due to product improvement are
inconsequential.
Ch9Q1
48. c
This file is copyright 2021, Rice University. All Rights Reserved.
If the Consumer Price Index changes from 108 in year one to 135 in
year two, what was rate of inflation over the year between the
measurements?
A. 10 percent
B. 15 percent
C. 20 percent
D. 25 percent
E. 30 percent
Ch9Q2
49. c
This file is copyright 2021, Rice University. All Rights Reserved.
If a government placed price caps or otherwise prevented prices from
rising due to inflation, what would be a likely negative outcome?
A. Runaway deflation
B. Surpluses of goods
C. Shortages of goods
D. Decreased trade
Ch9Q3
51. c
This file is copyright 2021, Rice University. All Rights Reserved.
If a country's GDP is $890 billion and its exports are $340 billion, what
is its export ratio?
A. 26%
B. 38%
C. 44%
D. 52%
Ch10Q1
52. c
This file is copyright 2021, Rice University. All Rights Reserved.
Which of the following represents a flow away from the U.S. economy?
A. The sale of U.S. coal to China to resell it to Indonesia
B. A Spanish firm winning a bidding war against a U.S. firm to purchase a
building in Chicago.
C. Altering the formula of a soft drink to sell it in Southeast Asia
D. A U.S company inventing a product and having it manufactured in
Madagascar for resale in the U.S.
Ch10Q2
53. c
This file is copyright 2021, Rice University. All Rights Reserved.
A country experiencing a current account surplus:
A. Needs to borrow internationally.
B. Is able to lend internationally.
C. Must also have had a surplus in its capital account.
D. Spent more than it earned on its merchandise and service trade,
international income payments and receipts and international transfers.
Ch10Q3
55. c
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Which of the following does not affect long-run aggregate supply?
A. changes in production methods.
B. changes in financial capital
C. changes in number of workers
D. changes in the price level
Ch11Q1
56. c
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The long-run aggregate supply curve will shift to the right if
A. population decreases is a decrease in population.
B. the economy experiences industrial improvements
C. inflation skyrockets
D. exports decrease.
Ch11Q2
57. c
This file is copyright 2021, Rice University. All Rights Reserved.
How do falling interest rates affect aggregate demand and equilibrium
price level in the short run?
A. Aggregate demand will rise, the equilibrium price level will fall.
B. Aggregate demand will rise, the equilibrium price level will rise.
C. Aggregate demand will fall, the equilibrium price level will fall.
D. Aggregate demand will fall, the equilibrium price level will rise.
Ch11Q3
58. c
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If aggregate demand falls, what would happen to GDP output and
prices.
A. Output would fall and prices would rise
B. Output would fall and prices would fall
C. It is impossible to tell.
Ch11Q4
60. c
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In what situation would an increase in government spending result in
inflation?
A. When real GDP is to the left of potential GDP on the AD curve.
B. When real GDP is to the right of potential GDP on the AD curve
C. When the government spending took place in a recession.
D. When the government spending took place as the economy was expanding.
Ch12Q1
61. c
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According to the Keynesian perspective, what is the primary
determinant of aggregate output and overall prices?
A. Government investment
B. Balance of trade
C. Aggregate supply
D. Aggregate demand
Ch12Q2
62. c
This file is copyright 2021, Rice University. All Rights Reserved.
What would be an appropriate fiscal policy to combat inflation?
A. Increase regulations
B. Provide stimulus payments directly to citizens
C. Expand public works programs
D. Increase taxes
Ch12Q3
64. c
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Which employment policy is most likely to be supported by neoclassical
economists?
A. An increase in taxes on corporations
B. A stimulus program for corporations
C. A safety net program that pays more if you can prove you are looking for
work.
D. A safety net program that increases payment for each child over 10
Ch13Q1
65. c
This file is copyright 2021, Rice University. All Rights Reserved.
What result do neoclassical economists expect from a rise in
aggregate demand?
A. Lower prices
B. Higher prices
C. Lower output
D. Higher output
Ch13Q2
66. c
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According to neoclassical economists, what is the barrier to
government action on fiscal relief?
A. International trade
B. No correlation between unemployment and inflation
C. Flexible prices
D. Consumer behavior
Ch13Q3
68. c
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If someone receives $50 in cash as a graduation present and puts it
into a savings account, what is the impact on M1 and M2?
A. They both decrease
B. M1 decreases, M2 increases
C. M1 decreases, M2 stays the same
D. M1 stays the same, M2 increases
CH14Q1
69. c
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A bank has $5 million in assets, and receives a deposit of $1 million. If
the reserve requirement is 5%, how much can the bank now lend out?
A. $3,000,000
B. $300,000
C. $5,500,000
D. $5,700,000
Ch14Q2
70. c
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A bank has $10 million in assets. If the reserve requirement is 5%, how
much money does the bank create if it lends out half of its assets?
A. $50,000,000
B. $95,000,000
C. $100,000,000
D. $115,000,000
Ch14Q3
72. c
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What tactic might the Federal Reserve use to increase the money
supply?
A. increase the discount rate
B. issue Treasury securities for purchase
C. increase the required reserve ratio
D. lower income taxes
Ch15Q1
73. c
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What is the effect of the Fed purchasing Treasury bonds?
A. higher reserves and more loans issued by banks
B. higher reserves and fewer loans issued by banks
C. lower reserves and more loans issued by banks
D. lower reserves and fewer loans issued by banks
Ch15Q2
74. c
This file is copyright 2021, Rice University. All Rights Reserved.
If the Fed increases the funds rate, which tool is it using?
A. Discount Rate
B. Open Market Operations
C. Reserve Requirements
Ch15Q3
76. c
This file is copyright 2021, Rice University. All Rights Reserved.
Which of the following should cause the Kenyan currency -- the shilling
-- to appreciate?
A. An issue with the reliability of Kenyan exports
B. Kenyan workers in neighboring countries are increasing the amount of
money they send to families in Kenya.
C. Repayment by the Kenyan government of its debt to another country.
D. Increased imports of Nigerian oil into Kenya
Ch16Q1
77. c
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Which of the following assets would be included in a measure of
purchasing power parity?
A. Parcels of land
B. Corporate stocks
C. Treasury bonds
D. Hours of labor
E. Units of microchips
Ch16Q2
78. c
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Suppose the average price of 2-liter bottle of Coke in the United States
is $3.00 while in Nigeria the average price is 1400 naira. If the price of a
dollar is 400 naira per dollar, the purchasing power parity model of
exchange rate determination suggests:
A. Compared to US dollars, the naira is undervalued
B. Compared to US dollars, the naira is overvalued
C. The price of Coke in Nigeria will go up
D. The price of Coke in the US will go down
Ch16Q3
80. c
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When the economy remains lower than potential real GDP, which
policy would bring it back to LRAS?
A. Increasing the money supply
B. Reducing oil supply
C. Increasing taxes
D. Increasing government purchases.
Ch17Q1
81. c
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What is most likely to lead to expansionary fiscal policy?
A. Plummeting gasoline prices
B. Decreasing consumer product supply
C. Lower investment spending
D. Increasing exports
Ch17Q2
82. c
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If prices and wages were not sticky, what would be the effect of an
increase in government spending?
A. Production output and prices would increase.
B. Production output would increase, but prices would remain unchanged.
C. Production output would not change, and prices would increase.
D. Production output and prices would decrease.
Ch17Q3
84. c
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From the perspective of the U.S., what is another word for inflows of savings
from foreign economies?
A. corporate assets
B. private investment
C. trade surpluses
D. trade deficits
Ch18Q1
85. c
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What results in financial capital leaving the economy?
A. increased corporate assets
B. decrease private investment
C. trade surpluses
D. trade deficits
Ch18Q2
86. c
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In what situation would an expansionary monetary policy result in
interest rate reduction?
A. In no situation.
B. If the expansion occurs while the budget deficit is increasing
C. If the expansion occurs while the budget deficit is decreasing
Ch18Q3
88. c
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What is the impact of capital outflows on the exchange rate of a small
economy?
A. It would increase
B. It would decrease
C. It would not change
Ch19Q1
89. c
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Recessions in high-income countries lead to:
A. their recategorization as low-income countries
B. a fall in GDP
C. cyclical unemployment
D. inflation
Ch19Q2
90. c
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European unemployment rates are typically _____ U.S. rates.
A. approximately the same as
B. Lower than
C. higher than
Ch19Q3
92. c
This file is copyright 2021, Rice University. All Rights Reserved.
Mexico can produce 100 kg of bananas or 60 kg of tomatoes. Canada
can produce 80 kg of wheat or 40 kg of flax. How can you describe the
nations’ opportunity cost related to the products mentioned?
A. Mexico’s opportunity cost for producing bananas is lower than Canada’s
opportunity cost to product wheat.
B. Mexico’s opportunity cost for producing bananas is greater than Canada’s
opportunity cost to product wheat.
C. There is not enough information to answer.
Ch20Q1
93. c
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The United States produces 100 pounds of soybeans or 20 barrels of
oil. In trade with Oman, if the United States exports 500 pounds of
soybeans, how many barrels of oil must it import to gain from trade?
A. At least 40 barrels
B. At least 50 barrels
C. At least 100 barrels
D. At least 200 barrels
Ch20Q2
94. c
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Consider the following table. If the quantity demanded is 22,000 units,
can the economy take full advantage of economics of scale?
A. Yes
B. No
C. There is not enough information
Ch20Q3
Quantity of Solar Panels Average Total Cost
5000 $120 each
10000 $85 each
15000 $63 each
20000 $51 each
30000 $51 each
40000 $51 each
96. c
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Domestic tobacco has long benefited from protectionism. A tariff on
foreign tobacco would have which of the following effects?
A. It would hurt domestic tobacco users but help domestic tobacco producers.
B. It would hurt both domestic tobacco users and producers, but the outcome
would be a net benefit due to the reduced externality of healthcare costs,
loss of life, and loss of productivity.
C. It would help domestic tobacco users but hurt domestic producers.
D. It would help both domestic tobacco users and producers.
Ch21Q1
97. c
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Which U.S. industry would most likely rationalize newly enacted
protectionism from the infant industry argument?
A. Cell phones
B. Solar panels
C. Driverless cars
D. Gaming consoles
Ch21Q2
98. c
This file is copyright 2021, Rice University. All Rights Reserved.
Additive manufacturing (also known as industry-level 3D printing) is a critical
new industry, sometimes labeled as part of the Fourth Industrial Revolution.
One particular application and innovation is in supply chain: Instead of
building a product or part in one location and shipping it across the country,
it can be printed at the factory where it will be used, reducing costs and
increasing flexibility.
In this particular industry, why would protectionism benefit BOTH domestic
consumers and domestic producers?
A. Both producers and consumers would benefit from time without too many options
in the market. Producers need the time to integrate the new technology, and
consumers need very narrow choices to learn how to use the technology.
B. Producers would benefit from the reduced foreign competition. Consumers will
benefit from having the time without too many products in the market in order to
understand the options and value.
C. Producers would benefit from the reduced foreign competition. Consumers will
benefit from increased flexibility and lower costs.
Ch21Q3
99. c
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