ECON 2105: Test 1 Preparation Questions

Find the equilibrium level of output (Y) for the economy, where the consumption function is given as C=200+0.8Y and the Planned Investment=40?

$1,200

If planned investment falls by $2,000 and the MPC is 0.8, the total effect on the economy is a decrease of _____ in income or output

$10,000

If income rises from $9,000 to $12,000 and investment increases from $8,000 to $9,200, then MPS is ____ and MPC is ____

0.4;0.6

If there are 1,600 people in the population; 1,1000 are employed, and 200 are unemployed, what is the unemployment rate?

15.4%

Bistro Belle Vie employs 4 waiters, each working 9 hours, to serve total of 72 tables. What is the per hour productivity of each waiter?

2 tables per hour

If the consumer price index (CPI) was 80 in 2017, 90 in 2018, 100 in 2019, and 110 in 2020, then the base year must be:

2019

If frictional unemployment is 3%, structural unemployment is 4%, and cyclical unemployment is 4%, the natural rate of unemployment is

7%

_____ unemployment is the result of changes in the business cycle

Cyclical

Suppose that anticipated inflation is 5% for the coming year, with loan contracts set at 9% with the expectation of a 4% return after inflation. If the actual inflation rate at the end of the year is 65

Debtors gain at the expense of creditor

What phase of the business cycle does the headline " Consumer Confidence at Highest Level in Three Years" suggest?

Recovery

Which of the following transactions should not be included in the calculation of GDP?

Sharon receives $100 in food stamps

A Japanese automaker produces $1 million worth of automobiles in its factory in the United States. How much of that is added to the GNP of the United States?

USD 0.00