ECON Final

Net Exports is the difference between exports and imports. What are the Net Exports for a country that imports $600bn of goods and exports $500bn of goods?

-$100 bn

Marginal product is calculated by finding the additional output from one more laborer. What is the Marginal Product is 2 workers produce 14 units and 3 workers produce 15 units.

1

In which of the following time periods did these United States experience stagflation?

1970s

The last time period the federal government of these United States ran a budget surplus was

1998-2001

Okun's Law states that for every 1% increase in unemployment, there is a 2% decrease in potential GDP. This creates a GDP gap. What is the GDP gap at 11% unemployment?

22%

An increase in the Supply of Loanable Funds decreases the Interest Rate. This is synonymous with _________.

A downward shift in supply

GDP is composed of four main components. Which of the following is a component of GDP?

A husband buying a card for his wife's anniversary

The Quantity Theory of Money states that MV=PQ. A tripling in the quantity of money must lead to_____.

A trippling of price or quantity

Which of the following accurately describes an embargo

A very severe quota with no goods permitted into a country

The two broad groups of economists are classical and Keynesian. The Classical school was greatly influenced by which economist?

Adam Smith

The Unemployment Rate is a report card calculated as a percentage. It divides the Number of Unemployed by the Labor Force. How is the Labor Force defined?

All people who can work

The Keynesian LRAS Curve is composed of three phases. The LRAS Curve is horizontal in the first phase. What does this mean?

An increase in Aggregate Demand does not cause a change in Aggregate Price Level

An increase in the Money Supply is correlated to _______.

An increase in aggregate demand

An increase in Government Expenditures is associated with which of the following?

An increase in real output

What types of laws prevent monopolies from occurring?

Anti-trust laws

Structural Unemployment results from having outdated skills that are no longer necessary. Which of the following examples illustrates Structural Unemployment?

Bank tellers losing their job due to ATM machines

There are three main functions to money. Which of the following is NOT a function of money?

Barter

Interest accumulated on the principle of a loan must also be paid. The accumulated interest is known as which of the following?

Burden of debt

Aggregate Demand is everything produced while Simple Demand is one good. Which statement reflects that differentiation?

Calculating the average price level of bananas in Germany

A Bond is a debt with a maturity between 2-30 years. Unlike the Money Market, the Bond Market

Can be accessed by various

A very strong relationship exists between the money Supply and Prices. Which of the following describes this relationship?

Causation

The Consumer Price Index (CPI) is the tool used to measure inflation. It is calculated through a _________ which asks the amount of money spent on specific categories of goods.

Census

The Short Run Aggregate Supply Curve can shift either Left or Right. Which of the following is NOT a determinant of Aggregate Supply?

Changes in inome

The circular flow model includes several actors. Which of the following is NOT listed in the Circular Flow Model?

Charities

There is a great geographic diversity on our planet. We can use this diversity to make our lives better by using which economic concept?

Comparative advantage

Households buy goods and services from firms. In which part of GDP would a household purchasing a good or service be considered?

Consumption

As an American citizen living in the USA, which of the following would classify as an export?

Corn from Iowa

Which of the following increases Aggregate Demand?

Decrease in the required reserve ratio

The Wage rate is determined by the intersection of Supply and Demand in the Labor Market. A rightward shift in Supply would cause which of the following?

Decrease in the wage rate

A quota is a type of trade restriction. What is the long-term goal of a quota?

Decrease the import of a foreign good thereby making it expensive

A leftward shift in Demand is associated with which of the following

Decreased Exchange Rate

The economic principle of Diminishing Marginal Utility is the decreasing value of a good each additional time it is used. How else can this be expressed?

Decreasing usefulness with each additional use

Two types of advantages exist in economic thought. Which of the following is NOT a type of advantage?

Determinant advantage

The Labor Demand Curve is similar to other Demand Curves. What characteristics does the Labor Demand Curve share with the Aggregate Demand Curve?

Downward sloping and to the right

Monetary Policy and Fiscal policy can be enacted simultaneously. Which of the following actions would be an example of Monetary and Fiscal Policy working together?

The federal reserve purchasing government bonds while congress passes a large spending bill

Prices above Market Equilibrium result in a disagreement over quantity. At higher prices, Suppliers produce more and Consumers buy less. Name this effect.

Excess Supply

The amount RGDP will increase from a tax break depends on consumer choices. Which of the following is NOT a category of spending made by consumer choices?

Export rate

Foreign currency is exchanged in a market structure. This means that the exchange rate is which of the following?

Flexible

Which of the following examples illustrates the Crowding Out Effect?

Formation of Space X

Capitalism, which have overlapping characteristics. Which of the following is not a stated principle?

Government helping to steer prices

In Microeconomics, we focus on individuals, unique markets, and individual firms. Which of the following is a Microeconomic subject of study?

Health Care in the US

The Demand Curve is a line that is downward sloping and to the right. What important aspect of Demand does this illustrate?

High prices/ low quantity, Low prices/ high quantity

The subject of trade involves the analysis of effects nations have on each other. This involves understanding which of the following?

How foreign production affects domestic production

Which of the following is Not as tool of Monetary or Fiscal Policy

Increase in economic growth

Monetary Policy can be either Expansionary or Contractionary. What is the purpose of Expansionary Monetary Policy?

Increase unemployment

A tariff will have which of the following effects?

Increased Net Exports

Which of the following resulted in a rightward shift in supply?

Industrial revolution

The creditor is lending parts of his savings to us when we borrow money. What else must be paid to the creditor in addition to the initial loan?

Interest

Which of the following graphically illustrates an economic shortage?

International Supply curves below Domestic Supply Curves

The third part of the Keynesian LRAS Curve and the Classical Curve are the same. This means the effects of shifts are what?

The same

Money is divided into separate categories. How many categories of money do we have?

Three

Which of the following is a strength of monetary policy?

Three options from which to choose

Treasury Bills are similar to Commercial Paper in that they are both short-term maturities. In what way are these assets different?

Treasury Bills are government debt while Commercial Paper is corporate debt.

The Short-Run Macroeconomic Model is very similar to the standard model for markets. In what ways are these two models similar?

Upward Sloping Supply Curve

Demand-Pull Inflation is a category of causes for increases in prices. How is this phenomenon illustrated through the Classical model of Aggregate Demand?

Upward shift in Aggregate Demand Curve

Aggregate Supply is very similar to the Simple Supply Curve we learned earlier. Which of the following is a similarity between the two curves?

Upward sloping

The supply curve in the foreign exchange market is similar to the microeconomic supply curve. In what ways are the two similar?

Upward-sloping and to the right

In 2014, the first woman was appointed as the chair of the federal reserve. What is her name?

Janet Yellen

Say's Law is named after a French economist who belonged to the Classical School of Economics. What is the name of this economist?

Jean Baptiste Say

Instrumental to current economic thought is Keynesianism. Who was this school of thought named after?

John Maynard Keynes

Consumer Surplus can be thought of as paying less and obtaining more of a good even though you might be willing to pay a higher price. How else can we think of consumer surplus?

Keeping more of our income

The Classical School of thought is dominated by a popular French phrase. What is this phrase?

Laissez-Faire

Pure competition and monopolistic competition are two market structures. Which of the following characteristics do these market structure share?

Large number of firms

The Current Account can be either positive or negative. Which of the following contributes to a negative current account?

Large number of imports

The Short-Run Phillips Curve shows the negative relationship between Unemployment and Inflation. This means that a high unemployment rate will correlate to which of the following?

Low inflation rate

Currency appreciation is caused by an increase in the value of domestic currency relative to foreign currency. Which of the following would NOT appreciate a currency?

Lower interest rates

M3 is the sum of all money in the economy. Which of the following correctly shows how to calculate for the entire Money Supply?

M1+M2+M3

Protectionism describes all government activity seeking to protect domestic producers. Which of the following is NOT an advantage to Protectionism?

Market Inefficienceis

Central Banks are concerned with the nation's Money Supply. This means that Central Banks are concerned with which of the following?

Monetary policy

There are three main components to economic growth. Which of the following is NOT a component of economic growth?

Monetary policy

Every Central Bank has two primary goals. Which of the following is NOT a primary goal of a Central Bank?

Monopolize access to printing currency

Non-Discretionary Fiscal Policy includes items in the government's budget for which MUST be purchased. Which of the following is NOT an example of non-discretionary spending?

National defense

The Circular Flow Diagram can be used to illustrate Aggregate Demand. What component of Aggregate Demand are the goods and services known as "simple demand" by households?

Net Exports

The economic principle of Time Preference states that people prefer to have something today than have the same thing tomorrow. What other economic principle can explain this?

Opportunity cost

Productivity is important because it is crucial to achieving economic growth. How is productivity calculated?

Output/Input

Out of the four Factors of Production, land is described as "all natural resources". Which of the following is NOT an example of Land?

Paper Clips

Currency depreciation is caused by a decrease in the value of domestic currency relative to foreign currency. Which of the following would depreciate a domestic currency?

Political instability

The Long-Run Phillips Curve is the result of employers adjusting to higher levels of inflation. The difference between the Long-Run and the Short-Run is

Prices and wages are sticky in short run and are flexible in Long Run

The Long Run Classical Macroeconomic Equilibrium model has a vertical Long-Run Aggregate Supply Curve. What does this mean?

Prices can change but Aggregate demand does not change.

Hyper-inflation is where prices rise dramatically over a short period of time. What is the cause given for cases of hyper-inflation?

Printing too much money so it loses value

A debt is a legal obligation to repay what you owe, whereas equity is _______.

Purchased ownership in a business

Variable Costs are the costs that increase with each additional unit produced. Which of the following is an example of variable costs

Raw materials expense

Nominal GDP will always be a higher reporting than Real GDP during periods of inflation. Why is this?

Real GDP focuses on GDP adjusted for price change

The Business Cycle rises and falls. The point immediately after the boom of the Business Cycle is known as the

Recession

There are three types of value for money. Which of the following is not a method of value?

Representation

The Chair of the Federal Reserve & the Federal Open Market Committee determine the percentage of a deposit which must be kept by the bank. What is the term for this percentage?

Required reserve ratio

If the interest rate rate is greater than the inflation rate, what happens?

Savers win

The determinants for the Aggregate Demand Curve are Income, Interest Rates, and Consumer Confidence. What do these determinants have the power to do?

Shift the aggregate demand curve

Budget deficits are created when government spending exceeds tax revenue. Which of the following programs largely contributes to our debt?

Social security and automatic stabilizers

There are two different ways to measure Gross Domestic Product. Which of the following is NOT a method of measurement?

Standard GDP

Which of the following examples would NOT experience the Law of Increasing Opportunity Costs?

Steel and Iron

Cost-Push inflation is a category of inflation cost from increases in input prices. Which of the following causes increases in input prices?

Supply Shocks

Perfect Competition has a price _____ than Monopolistic Competition.

lower

The international supply and demand model has two supply curves and ____ demand curve

one

Monetary Policy seeks to achieve ______, as well as control the rate of inflation.

price stability

Economic growth is measured on an annual basis. This involves______

reviewing economic quarters with economic quarters of another year

The Classical Model of Aggregate Demand has a perfectly vertical LRAS Curve. This means that an increase in Investment will ______

shift the AD curve up

The Capital Account is calculated by looking at flows of investment. If Canadians are investing in American bonds, the American Capital Account is in a ______

surplus

The Laffer Curve is parabolic meaning that it intersects the X-axis how many times?

two