ECON 201-03 - EXAM-1

A prolonged and deep recession is called

depression

Which of the following would be counted in 2016's GDP?

the value of a refrigerator manufactured in 2016 but not sold in 2016

When the price of butter increases 15%, quantity demanded decreases 15%. The price elasticity of demand for butter is ________ and total revenue from butter sales will ________.

unit elastic; not change

In the circular flow diagram, the different payments made by firms to households include

wages, rents, and profits

Stagflation occurs when the economy experiences with

High inflation rate and high unemployment rate

Upon graduating with an accounting degree, you open your own accounting firm of which you and your assistant are the only employees. To start the firm you passed on a job offer with a large accounting firm that offered you a salary of $60,000 annually. Last year you earned a total revenue of $130,000. Rent and supplies last year were $40,000. Your assistant's salary is $35,000 annually. Your annual economic costs are

$135,000

The national debt for USA has been rising rapidly as the budget deficit continue to rise. In 2021, the US Budget Deficit and Debt are expected to be

$3 Trillion and $28 Trillion

All commercial banks successfully created $800 million in circulation. If the reserve ratio requirement in only 4%, how much cash deposits banks needed in the beginning.

$32 million

If your tuition is $2,000 this semester, your books cost $400. Your receive an academic tuition scholarship of $600.You can only work 10 rather than 40 hours per week during the 15 weeks you are taking classes and you make $14 per hour, and your room and board is $4,000 for the semester, then your opportunity cost of attending college this semester is

$8,100

A German company made an automobile engine for $20,000. The company then sold the engine to a Mexican Company at 20% profit. The Mexican company added the body of the car with the engine at a cost of $10,000. The company then sold the car to a dealer in Atlanta with a 20% profit on its total cost. The dealer added a 20% profit on its purchase price and sold the car to you. What is the GDP share for USA?

$8,160

If the labor force is 300 million and 200 million have employment, then the unemployment rate is

33%

The relationship between PPI and CPI in the United States can be described as

Complement each other to determine inflation rate

The US Federal Government is trying to solve the economic crisis due to COVID-19 Pandemic. What are the instruments that the government should be using for desirable results

Government Expenditures and Taxes

Refer to this Figure. Pretzel manufacturers are asking for help from the government. What is the correct action by the government to ensure a price of $1.10 for the pretzel?

Government will have to buy 25 at the requested price.

You are visiting London and you are at a shopping mall. You bought a pair of leather shoes and you must pay 78 of the local currency. But you only have US Dollars in your pocket. How many US Dollars you must pay to the shop owner for the shoes?

USD 107

The government wants to encourage consumer spending through cutting income taxes. This is an example of

a fiscal policy

A maximum price, set by the government, that sellers may charge for a good is known as

a price ceiling

A college s professor quits his/her job at a university and starts looking for a better job in another university, he/she is

frictionally unemployed

The PPI is a price index that tends to be a leading indicator of

future inflation rates

Inflation is a(n)

increase in the overall price level.

When the price of fresh fish increases 15%, quantity demanded decreases 10%. The price elasticity of demand for fresh fish is ________ and total revenue from fresh fish sales will ________.

inelastic; increase

The Fed can influence long-term interest rates by

influencing the current one-year rate, affecting people's expectations of future short-term rates

The Federal Reserve affecting the supply of money is known as

monetary policy

Justin and all other sellers sell their hats for $15. During the homecoming game the demand for hats increases from 200 to 300. However, the price of T-Shirts remained at $15. Thus, demand must be

perfectly elastic

An auto worker who has lost his job due to automation of the factory is an example of

structural unemployment