Econ Final Quiz

In the base year, the GDP deflator is always a. -1 b. 0 c. 1 d. 100

100

Which of the following rates of growth in the money supply is likely to lead to the highest level of inflation in the economy? 1 percent per year a. 1 percent per year b. 2 percent per year c. 3 percent per year d. 4 percent per year

4 percent per year

Which of the following is correct? a. Countries with the highest growth rates over the last 120 years are the ones that had the highest level of real GDP 120 years ago. b. Countries with the highest growth rates over the last 120 years are the ones that had the highest level of real GDP 120 years ago. c. The ranking of countries by income changes little over time. d. Even though Japan had a higher growth rate of real GDP per person than the U.S. over the last 120 years, it's level of real GDP per person is less than that of the U.S.

Even though Japan had a higher growth rate of real GDP per person than the U.S. over the last 120 years, it's level of real GDP per person is less than that of the U.S.

Which of these activities will most likely result in an external benefit? a. Ted purchases a dilapidated house and cleans up the yard and exterior of the house. b. Tim purchases an iPhone and downloads new apps. c. Terri purchases a new SUV and drives it to work every day d. Thomas purchases a suit and wears it on his interviews.

Ted purchases a dilapidated house and cleans up the yard and exterior of the house.

A survey of professional economists revealed that more than three-fourths of them agreed with fourteen economic propositions. Which of the following is not one of those propositions? a. The United States should not restrict employers from outsourcing work to foreign countries. b. The United States should withdraw from the North American Free Trade Agreement (NAFTA). c. The United States should eliminate agricultural subsidies. d. Local and state governments should eliminate subsidies to professional sports franchises.

The United States should withdraw from the North American Free Trade Agreement (NAFTA).

Two goods are substitutes when a decrease in the price of one good a. decreases the demand for the other good. b. decreases the demand for the other good. c. decreases the demand for the other good. d. increases the quantity demanded of the other good.

decreases the demand for the other good.

In the circular-flow diagram a. firms are buyers in the markets for goods and services. b. households are sellers in the markets for the factors of production. c. firms are sellers in the markets for factors of production and in the markets for goods and services. d. dollars that are spent on goods and services flow directly from firms to households.

households are sellers in the markets for the factors of production

It costs a meat-processing company $50,000 to produce 5,000 pounds of steak. The company's cost will be $50,009 if it produces an additional pound of steak. If the company produces 5,001 pounds of steak then a. its average cost is greater than its marginal cost. b. its average cost and its marginal cost are equal. c. its average cost is less than its marginal cost. d. there is insufficient information to compute average and marginal costs.

its average cost is greater than its marginal cost.

Transactions involving items produced in the past, such as the sale of a 5-year-old automobile by a used car dealership or the purchase of an antique rocking chair by a person at a yard sale, are a. included in current GDP because GDP measures the value of all goods and services sold in the current year. b. included in current GDP but valued at their original prices c. not included in current GDP because it is difficult to determine their value. d. not included in current GDP because GDP only measures the value of goods and services produced in the current year.

not included in current GDP because GDP only measures the value of goods and services produced in the current year.

The word "economy" comes from the Greek word oikonomos, which means a. environment. b. production c. one who manages a household d. one who makes decisions

one who manages a household.

Wheat is the main input in the production of flour. If the price of wheat decreases, then we would expect the a. demand for flour to increase. b. demand for flour to decrease. c. supply of flour to increase. d. supply of flour to decrease.

supply of flour to increase.

During a certain year, the consumer price index increased from 120 to 132 and the purchasing power of a person's bank account increased by 4 percent. For that year, a. the nominal interest rate was 6 percent. b. the nominal interest rate was 14 percent. c. the inflation rate was 12 percent. d. the inflation rate was 9 percent.

the nominal interest rate was 14 percent.

If there is a shortage of farm laborers, we would expect a. the wage of farm laborers to increase. b. the wage of farm laborers to decrease. c. the price of farm commodities to decrease. d. a decrease in the demand for substitutes for farm labor.

the wage of farm laborers to increase.

A normative economic statement such as "The minimum wage should be abolished" a. would likely be made by an economist acting as a scientist. b. would require values and data to be evaluated. c. would require values and data to be evaluated. d. could not be evaluated by economists acting as policy advisers.

would require values and data to be evaluated.

​In the simple circular-flow diagram, with households and firms, GDP can be computed a. ​as the income received by households, in the form of wages, rent and profit. b. as the income received by households in the form of wages. c. as the payments made by firms for labor. d.​ as the profits received by households.

​as the income received by households, in the form of wages, rent and profit.