econ final practice
Tariffs and quotas benefit U.S. consumers Question options: a) True b) False
False
The current chairman of Federal Reserve is Ben Bernanke Question options: a) True b) False
False
Value of bond increases as interest rates increase Question options: a) True b) False
False
When you buy a TV made in Japan, the U.S. GDP increases Question options: a) True b) False
Flase
When you buy a TV made in Japan, the U.S. imports increase Question options: a) True b) False
True
Max has just graduated college and is looking for a job that suits his professional skills. Max is considered to be Question options: a) Employed b) Unemployed c) Not in the Labor Force d) Discouraged worker
B) unemployed
Big Mac index shows how much Big Mac costs in other countries in $ U.S. Question options: a) True b) False
False
Bonds are riskier than stocks Question options: a) True b) False
False
Federal Reserve is responsible for formulating fiscal policy Question options: a) True b) False
False
Financial transactions benefit one participant and hurt another participant Question options: a) True b) False
False
Inflation is always hurtful to our economy Question options: a) True b) False
False
Lobbyists promote policies supported by majority of voters Question options: a) True b) False
False
Median voter decides the outcome of the election in case of a tie Question options: a) True b) False
False
Pegged exchange rate is better than a flexible exchange rate Question options: a) True b) False
False
Policymakers would like to achieve 0% unemployment rate Question options: a) True b) False
False
Politicians always agree with each other because they want to implement the same policies Question options: a) True b) False
False
U.S. and Germany use flexible exchange rate when exchanging $ for euro Question options: a) True b) False
True
United States has a trade deficit Question options: a) True b) False
True
A stock is an example of financial instrument Question options: a) True b) False
True
Dollar appreciation hurts U.S. producers Question options: a) True b) False
True
In the market for U.S. dollar, the demand for $ is represented by foreigners Question options: a) True b) False
True
Individual vote is most likely not going to determine the outcome of a major election Question options: a) True b) False
True
Market efficiency hypothesis says that all stocks are fairly valued Question options: a) True b) False
True
Oklahoma is a part of the Kansas Federal Reserve branch Question options: a) True b) False
True
One of the functions of financial instruments is storing excess capital Question options: a) True b) False
True
When interest rates rise, people want to invest less Question options: a) True b) False
True
Suppose you put $30 into a bank account today. Interest is paid annually and the annual interest rate is 5 percent. How much money will you have in the bank 3 years from now? Question options: a) $30*(1+0.05)^3 b) $30*(1-0.05)^3 c) $30*(1+0.03)^5 d) $30*0.05^3
a) $30*(1+0.05)^3
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2005. What is this country's real GDP for 2006? Question options: a) $390 b) $540 c) $490 d) Not enough information provided.
a) $390
In the economy of Wrexington in 2008, consumption was $5000, exports were $100, government purchases were $900, imports were $200, and investment was $1000. What was Wrexington's GDP in 2008? Question options: a) $6800 b) $6600 c) $6400 d) $6200
a) $6800
Comiland is a country that I made up while thinking about this question. Imagine that there are 2,000 people who live in this country, 200 of which are unemployed and 1300 of which are employed. The CPI for this country was 115% in 2005 and 125% in 2007. Real GDP of Comiland in 2010 was $120 million and Real GDP in 2011 was $121 million. How would you calculate inflation rate for Comiland from 2005 to 2007? Question options: a) (125-115)/115*100% b) 125/115*100% c) 115/125*100% d) (125115)/125*100%
a) (125-115)/115*100%
I bought my first car for $2000 in 2002. This year, my niece bought her first car for $3,500. If accounted for the inflation, what is the value of my first car for in the current dollars? CPI for 2002 is 180 and CPI for "now" is 230. Question options: a) 2000*230/180 b) 2000*180/230 c) 3500*230/180 d) 2000*(230-180)/230
a) 2000*230/180
I bought a scarf in Peru for 50 soles. The exchange rate is 1 sol = $0.28. How much did the scarf cost me in the $US? Question options: a) 50*0.28 b) 50/0.28 c) Not enough information to determine the answer d) It cost me too much
a) 50*0.28
In which of the following scenarios GDP increases because consumption increased? Question options: a) Debbie spends $200 to buy her husband dinner at the finest restaurant in Boston b) Sarah spends $1800 on a new laptop to use in her publishing business. The laptop was built in China c) Jane spends $1200 on a computer to use in her editing business. She got last year's model on sale for a great price from a local manufacturer. d) James receives a Social Security check
a) Debbie spends $200 to buy her husband dinner at the finest restaurant in Boston
Bernie lost his job 2 month ago. He is looking for an engineering job and meanwhile supports his family by working for a cab company 5 hours a week. According to the definitions, Bernie is considered to be Question options: a) Employed b) Unemployed c) Not in the Labor Force d) Discouraged worker
a) Employed
Which of the following policies would be a correct response by the Fed during high inflation? Question options: a) Raise reserve requirements b) Lower discount rate c) Increase government spending d) Buying bonds
a) Raise reserve requirements
Suppose voters have the following preferences: 35% of the voters want to increase spending on education by more than $2000 per student 20% of the voters want to increase spending on education by about $1500 per student 45% of the voters want to increase spending on education by about $1000 per student If the outcome is determined by the plurality rule, the candidate that wants to get elected should advocate for which of the following policies? Question options: a) increase spending on education by about $1000 per student b) increase spending on education by about $1500 per student c) increase spending on education by about $2000 per student d) increase spending on education by about $500 per student
a) increase spending on education by about $1000 per student
In the election where a policy needs to get more than 50% of the votes, the voting rule is called a Question options: a) majority rule b) plurality rule c) Borda rule d) Median voter
a) majority rule
The efficient markets hypothesis implies Question options: a) that all stocks are fairly valued all the time and that no stock is a better buy than any other. b) that all stocks are fairly valued all the time, but that some stocks may be better buys than other. c) that some stocks may be better buys than others and stock experts can determine which ones. d) that no stock is efficiently valued.
a) that all stocks are fairly valued all the time and that no stock is a better buy than any other.
US dollar will appreciate in which of the following scenarios? (select all that apply) Question options: a) High inflation in the US b) High economic growth in the US c) Increase popularity of the US goods d) Increase in interest rates in the US e) Political instability in the US f) High demand for the US dollar
a, b, c, d, e, f,
If the annual interest rate is 2 percent, then what was the present value of the $100 1 year ago? Question options: a) $100*(1+0.02)^1 b) $100/(1+0.02)^1 c) $100/(1-0.02)^1 d) $100*(1+0.01)^2
b) $100/(1+0.02)^1
Tyler and Camille both live in Oklahoma. A new-car dealer in Oklahoma bought a new car from the manufacturer for $18,000 and sold it to Tyler for $22,000. Later that year, Tyler sold the car to Camille for $17,000. By how much did these transactions contribute to U.S. GDP for the year? Question options: a) $18,000 b) $22,000 c) $17,000 d) $39,000
b) $22,000
Comiland is a country that I made up while thinking about this question. Imagine that there are 2,000 people who live in this country, 200 of which are unemployed and 1300 of which are employed. The CPI for this country was 115% in 2005 and 125% in 2007. Real GDP of Comiland in 2010 was $120 million and Real GDP in 2011 was $121 million. What is the labor force in Comiland? Question options: a) 2000 b) 1500 c) 200 d) 1800
b) 1500
Comiland is a country that I made up while thinking about this question. Imagine that there are 2,000 people who live in this country, 200 of which are unemployed and 1300 of which are employed. The CPI for this country was 115% in 2005 and 125% in 2007. Real GDP of Comiland in 2010 was $120 million and Real GDP in 2011 was $121 million. What is the unemployment rate in Comiland? Question options: a) 1500/2000 b) 200/1500 c) 200/2000 d) 200/1300
b) 200/1500
The saying "it pays to be small in politics" refers to which of the following? Question options: a) Small groups have more power to enact a certain policy b) The cost of policies advocated by small groups may go unnoticed when spread among large group of payers c) Small groups have more resources to lobby for their policies d) Large groups are trying to enact inefficient policies
b) The cost of policies advocated by small groups may go unnoticed when spread among large group of payers
Which of the following is the largest? Question options: a) The future value of $20 when the interest is 2% in 5 years b) The future value of $20 when the interest is 2% in 10 years c) The present value of $20 when the interest is 2% 5 years ago d) The future value of $10 when the interest is 2% in 5 years
b) The future value of $20 when the interest is 2% in 10 years
Marcus puts a greater proportion of his portfolio into government bonds. Marcus's action Question options: a) increases both risk and the average rate of return. b) decreases both risk and the average rate of return. c) increases risk, but decreases the average rate of return. d) decreases risk, but increases the average rate of return.
b) decreases both risk and the average rate of return.
When you use money to buy shoes, the money plays a role of Question options: a) unit of account b) medium of exchange c) store of value d) barter
b) medium of exchange
The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2005. What is this country's nominal GDP for 2006? Question options: a) $440 b) $540 c) $640 d) Not enough information provided.
b) $540
A country's GDP per capita is $2590. There are 100 residents, 20 of them are children, 20 people are retired, and 60 people are adults who are willing and capable to work, yet 5 of those people don't have jobs. What is the GDP for this country? Question options: a) $2590 b) $25.9 c) $25900 d) Not enough information provided.
c) $25900
Comiland is a country that I made up while thinking about this question. Imagine that there are 2,000 people who live in this country, 200 of which are unemployed and 1300 of which are employed. The CPI for this country was 115% in 2005 and 125% in 2007. Real GDP of Comiland in 2010 was $120 million and Real GDP in 2011 was $121 million. How would you calculate real GDP growth from 2010 to 2011? Question options: a) 121/120*100% b) (121-120)/121*100% c) (121-120)/120*100% d) (125-115)/125*100%
c) (121-120)/120*100%
A country's GDP per capita is $2590. There are 100 residents, 20 of them are children, 20 people are retired, and 60 people are adults who are willing and capable to work, yet 5 of those people don't have jobs. What is the unemployment rate for this country? Question options: a) 20% b) 5% c) 8.3% d) Not enough information provided.
c) 8.3%
In which of the following scenarios GDP increases because investment increased? Question options: a) Debbie spends $200 to buy her husband dinner at the finest restaurant in Boston b) Sarah spends $1800 on a new laptop to use in her publishing business. The laptop was built in China c) Jane spends $1200 on a new computer to use in her editing business. d) James receives a Social Security check
c) Jane spends $1200 on a new computer to use in her editing business.
Suppose voters have the following preferences: 35% of the voters want to increase spending on education by more than $2000 per student 20% of the voters want to increase spending on education by about $1500 per student 45% of the voters want to increase spending on education by about $1000 per student If the outcome is determined by the majority rule, the candidate that wants to get elected should advocate for which of the following policies? Question options: a) increase spending on education by about $1000 per student b) increase spending on education by about $1500 per student c) increase spending on education by about $2000 per student d) increase spending on education by about $500 per student
c) increase spending on education by about $2000 per student
When you use money to buy bonds or stocks, the money plays a role of Question options: a) unit of account b) medium of exchange c) store of value d) barter
c) store of value
Which of the following is included in the GDP for the United States in 2023? Question options: a) A Toyota car produced in Japan in 2023 and sold in the US b) A Ford car produced in the US in 2022 but sold in 2023 c) Parts of the Ford car to be assembled into a car in 2023 d) A GM car produced in the US in 2023 and sold in 2024
d) A GM car produced in the US in 2023 and sold in 2024
Voters tend to be ignorant due to the following reasons, except Question options: a) Getting informed is costly b) A single vote is not going to change the outcome of a major election c) Sometimes cost of getting information outweighs the benefits of "informed" voting d) A single vote can change the outcome of an election and it's a big responcibility to carry
d) A single vote can change the outcome of an election and it's a big responcibility to carry
Which of the following policies would be a correct response by the Fed during high unemployment? Question options: a) Raise reserve requirements b) Selling bonds c) Increase government spending d) Buying bonds
d) Buying bonds
Which of the statements is a true definition of GDP? Question options: a) GDP is the market value of all goods & services produced within a country in a given period of time. b) GDP is the market value of all final goods & services sold and bought within a country in a given period of time. c) GDP is the market value of all final goods & services produced by the residents of a country in a given period of time. d) GDP is the market value of all final goods & services produced within a country in a given period of time.
d) GDP is the market value of all final goods & services produced within a country in a given period of time.
In which of the following scenarios GDP does not change? Question options: a) Debbie spends $200 to buy her husband dinner at the finest restaurant in Boston b) Sarah gets her first paycheck for being a police officer c) Jane spends $1200 on a new computer to use in her editing business. d) James receives a Social Security check
d) James receives a Social Security check
Who is the current chairman of the Federal Reserve? Question options: a) Ben Bernanke b) Paul Volcker c) Jannett Yellen d) Jerome Powell
d) Jerome Powell
A country's GDP per capita is $2590. There are 100 residents, 20 of them are children, 20 people are retired, and 60 people are adults who are willing and capable to work, yet 5 of those people don't have jobs. What is the inflation rate in this country? Question options: a) 2% b) 5% c) 8.3% d) Not enough information provided.
d) Not enough information provided.
