Econ Final (Waldon)
A(n) _____________ in capital goods should ____________ worker productivity. a. increase; increase b. decrease; increase c. increase; have no effect on d. increase; decrease e. decrease; have no effect on
A
According to the law of demand, all other things being equal, a. the quantity demanded falls when the price rises, and the quantity demanded rises when the price falls. b. the demand falls when the price rises, and the demand rises when the price falls. c. the demand falls when the price falls, and the demand rises when the price rises. d. the quantity demanded falls when the price falls, and the quantity demanded rises when the price rises.
A
Aggregate demand is about _________ and aggregate supply is about _________. a. spending; production b. income; spending c. production; income d. production; spending e. saving; profit
A
An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an: a. outward shift of the PPF. b. outward rotation along the y axis. c. outward rotation along the x axis. d. inward shift of the PPF.
A
An opportunity cost is the: a. cost of a purchase or decision as measured by what is given up. b. highest possible cost. c. lowest possible cost. d. cost of finding the lowest price for a product.
A
Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the GDP deflator in 2012? a. 100 b. 103 c. 109 d. 106 e. 108
A
Consider the production possibilities frontier (PPF) shown in the figure below to answer the questions that follow. Given current resources and technology, the unattainable range is best described as: a. only area O: points outside the PPF. b. points on the PPF only. c. only area I: points inside the PPF. d. area I: inside the PPF and points on the PPF.
A
Fiscal policy includes: a. increases and decreases to both taxes and government spending. b. only increases and decreases to taxes. c. only decreases in taxes and increases in government spending. d. only increases in taxes and decreases in government spending. e. only increases and decreases to government spending.
A
GDP is best defined as the total market value of all: a. final goods and services produced within a country within a given time. b. services produced within a country within a given time. c. goods produced within a country within a given time. d. final goods produced within a country within a given time. e. goods and services produced within a country within a given time.
A
Joanna was laid off from her job 11 months ago. After searching for a job for months, Joanna finds a job but is only offered part-time work. Joanna would rather be working full-time. Economists would classify Joanna as: a. underemployed. b. overemployed. c. a discouraged worker. d. underpaid. e. unemployed.
A
Joanna was laid off from her job 11 months ago. After searching for a job for months, Joanna finds a job but is only offered part-time work. Joanna would rather be working full-time. Economists would classify Joanna as: a. underemployed. b. unemployed. c. a discouraged worker. d. overemployed. e. underpaid.
A
Refer to the accompanying figure to answer the questions that follow. The market is currently at market equilibrium. If a binding price ceiling of P 1 is imposed, by how much would the quantity demanded change? a. It would increase by 12,000 units. b. It would increase by 30,500 units. c. It would increase by 30,000 units. d. It would decrease by 12,000 units.
A
Refer to the following figure to answer the questions that follow. According to the figure, if the economy started at full-employment output, contractionary monetary policy would cause real gross domestic product (GDP) to __________ in the short run. a. decrease from Y2 to Y1 b. increase from Y2 to Y3 c. decrease from Y3 to Y2 d. increase from Y1 to Y2 e. increase from Y1 to Y3
A
Refer to the following figure to answer the questions that follow. Based on the figure, if the economy is currently at point B, then in the long run, we can expect we will move to: a. point C. b. point D. c. point A and then point C. d. point A. e. point C and then point D.
A
Refer to the following table to answer the questions that follow. Given the same quantity of resources, what is Alicia Keys's opportunity cost of producing a New York pizza? a. 5/2 Philly cheesesteaks b. 2/5 Philly cheesesteak c. 1/3 New York pizza d. 4/5 New York pizza
A
The term ___________ is a popular way to describe the recession-expansion pattern followed by the economy. a. business cycle b. long-run cycle c. output cycle d. unemployment cycle e. inflation cycle
A
Use the following table to answer the questions that follow: According to the table, the unemployment rate in this economy is equal to: a.. 7.8%. b. 63.4%. c. 4.9%. d. 92.2%. e. 8.5%.
A
Which of the following would cause an upward movement along the aggregate demand curve? a. An increase in the price level increases the value of real wealth. b. The value of the dollar increases. c. There is an increase in expected income. d. There is an increase in the expected price level. e. An increase in housing prices increases the value of real wealth.
A
According to the Fisher equation, if a bank extends a loan for 3% and the inflation rate ends up being 2%: a. the nominal interest rate is 1%. b. the real interest rate is 1%. c. the real interest rate is -1%. d. the nominal interest rate is -1%. e. the nominal interest rate is 5%.
B
Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the real GDP in 2013? a. $13,600 b. $5,400 c. $1,700 d. $6,300 e. $6,450
B
Consider the following data to answer the questions that follow. Which country has the lowest average living standard? a. B b. D c. C d. A e. E
B
Donna Newton made $0.30 per hour in 1946 at a small restaurant in Clearfield, Pennsylvania. If the consumer price index (CPI) was 18.3 in 1946 and 202.4 in 2011, then Donna's inflation-adjusted wage would be: a. $0.30. b. $3.32. c. $7.25 by U.S. law. d. $2.87. e. $0.61.
B
Economists refer to full-employment output as: Answers: a. gross domestic product (GDP) per capita. b. potential GDP. c. nominal GDP. d. real GDP. e. natural GDP.
B
GDP is best defined as the total market value of all: a. goods produced within a country within a given time. b. final goods and services produced within a country within a given time. c. services produced within a country within a given time. d. goods and services produced within a country within a given time. e. final goods produced within a country within a given time.
B
Given the same quantity of resources, what is Alicia Keys's opportunity cost of producing a New York pizza? a. 4/5 New York pizza b. 5/2 Philly cheesesteaks c. 2/5 Philly cheesesteak d. 1/3 New York pizza
B
In 2010, U.S. gross domestic product (GDP) was roughly $14.6 trillion. Given that the U.S. population was roughly 308 million people, per capita GDP in the United States in 2010 was roughly: a. $22,000. b. $47,403. c. $4,760. d. $475,990. e. $0.22.
B
Marginal propensity to consume is: a. the portion of additional income that is taxed. b. the portion of additional income that is spent on consumption. c. the portion of additional income that is saved. d. the portion of total income that is spent on consumption. e. the portion of total income that is saved.
B
Refer to the accompanying figure to answer the questions that follow. The market is currently at market equilibrium. If a binding price ceiling of P 1 is imposed, by how much would the quantity demanded change? a. It would increase by 30,000 units. b. It would increase by 12,000 units. c. It would increase by 30,500 units. d. It would decrease by 12,000 units.
B
Refer to the following figure for the questions that follow. The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is: a. 7 blueberry pies. b. 2 apple pies. c. 14 apple pies. d. 2 blueberry pies.
B
Refer to the following figure to answer the questions that follow. According to the figure, and assuming the marginal propensity to consume is 0.75, to shift aggregate demand enough to be back at long-run equilibrium, the government would have to increase government spending by: a. $500 million. b. $5 billion. c. $1 billion. d. $20 billion. e. $10 billion.
B
Refer to the following figure to answer the questions that follow. According to the figure, if the economy started at full-employment output, contractionary monetary policy would cause real gross domestic product (GDP) to __________ in the short run. a. increase from Y2 to Y3 b. decrease from Y2 to Y1 c. increase from Y1 to Y2 d. increase from Y1 to Y3 e. decrease from Y3 to Y2
B
The four major expenditure categories of GDP are: a. consumption, investment, taxes, and net exports. b. consumption, investment, government purchases, and net exports. c. consumption, government purchases, taxes, and investment. d. consumption, investment, government purchases, and stocks. e. consumption, imports, exports, and government purchases.
B
The interest rate is: a. the price of land. b. the price of loanable funds. c. the price of labor. d. the marginal rate of investment supply. e. both the price of capital and the price of labor.
B
Use the following example to answer the questions that follow: Imagine that you deposit $25,000 in currency (which you had been storing in your closet), into your checking account at the bank. Assume that this institution has a required reserve ratio of 25%. As a result of this deposit, what is the maximum amount the bank can hold as loans? a. $25,000 b. $18,750 c. $100,000 d. $0 e. $31,250
B
Use the following information to answer the questions that follow. Market for flat-screen TVs: Demand: Qd = 2,600 - 5 P Supply: Qs = -1,000 + 10 P What would be the quantity demanded if a price ceiling is set at $150? a. 240 b. 1,850 c. 1,350 d. 260
B
Which of the following is true? a. Long-run aggregate supply is positively related to the price level. b. Long-run aggregate supply is independent of the price level. c. Short-run aggregate supply is independent of the price level. d. Short-run aggregate supply is inversely related to the price level. e. Long-run aggregate supply is inversely related to the price level.
B
A shortage occurs whenever: a. the quantity supplied is greater than the quantity demanded. b. the price is above the equilibrium quantity. c. the quantity supplied is less than the quantity demanded. d. the government places a binding price floor.
C
According to the law of demand, all other things being equal, a. the demand falls when the price falls, and the demand rises when the price rises. b. the quantity demanded falls when the price falls, and the quantity demanded rises when the price rises. c. the quantity demanded falls when the price rises, and the quantity demanded rises when the price falls. d. the demand falls when the price rises, and the demand rises when the price falls.
C
Actions and activities are encouraged with which type of incentive? a. negative b. unintended c. positive d. complementary
C
An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions. a. expansionary; expansionary b. contractionary; expansionary c. expansionary; contractionary d. contractionary; contractionary e. countercyclical; expansionary
C
An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an: a. outward rotation along the x axis. b. inward shift of the PPF. c. outward shift of the PPF. d. outward rotation along the y axis.
C
Between 2006 and 2010, per capita real gross domestic product (GDP) in India grew at an average rate of 7.11% per year. Which of the following factors would have contributed most to this rapid escalation in growth? a. increases in government regulations b. restrictions on immigration c. advances in technology d. a significant increase in taxes e. decrease in education standards
C
Firms that help to channel funds from savers to borrowers are known as: a. treasury securities. b. marketers. c. financial intermediaries. d. channelers. e. securities.
C
From 2009 to 2010 per capita real gross domestic product (GDP) in the United States grew by 1.8%. At that rate, according to the Rule of 70, in roughly how many years will per capita real GDP double? a. 72 years b. 68 years c. 39 years d. 18 years e. 29 years
C
If short-run equilibrium output is above full employment output, then in the long run input prices will: a. increase and short-run aggregate supply will increase. b. increase and output will be unaffected. c. increase and output will fall. d. decrease and output will increase. e. decrease and output will fall.
C
Macroeconomics is the study of: a. the behavior of the consumer. b. changes in commodity prices. c. changes in national income. d. the behavior of the firm. e. individual markets.
C
Many consumer items eventually go out of style, and because fewer people want these items, demand for them drops. When this happens, we usually see production of these items stop. What happens to the equilibrium price and equilibrium quantity in a market like this? a. The equilibrium price goes up and equilibrium quantity goes up. b. The equilibrium price goes up and equilibrium quantity is indeterminate. c. The equilibrium price is indeterminate and equilibrium quantity goes down. d. The equilibrium price is indeterminate and equilibrium quantity goes up.
C
Microeconomics is the branch of economics that focuses on the: a. consumption side of the economy. b. involvement of the government in the entire economy. c. choices and decision-making of individuals and firms. d. production side of the economy.
C
Real GDP is equal to: a. current prices X base year output. b. base year prices X base year output. c. base year prices X current output. d. current prices X current output. e. current output / base year prices.
C
Real per capita gross domestic product (GDP) is defined as: a. the median level of income in a country. b. the market value of all final goods and services consumed in a country. c. the average level of income in a country. d. the average number of goods produced in a country. e. the total level of income in a country.
C
Refer to the following figure for the questions that follow. The opportunity cost of increasing production of blueberry pies from 7 to 11 pies is: a. 14 apple pies. b. 7 blueberry pies. c. 2 apple pies. d. 2 blueberry pies.
C
The Federal Reserve generally uses ___________________ to implement monetary policy. a. fiscal policy b. discount policies c. open market operations d. reserve requirements e. government spending and taxes
C
What is the quantity demanded when the price floor is $0.75 in the market for public transportation? a. 0 (zero) b. 75,000 c. 86,000 d. 116,000
C
When the demand curve shifts to the right and the supply curve is held constant, a. the equilibrium price and quantity decrease. b. the equilibrium price increases, and the equilibrium quantity decreases. c. the equilibrium price and quantity increase. d. the equilibrium price decreases, and the equilibrium quantity increases.
C
Which of the following will cause a movement along a good's supply curve? a. the government places a subsidy on the producer of the good b. the production process of the good becomes more efficient c. the price of the good increases d. more firms enter the market
C
Which of the following would cause an upward movement along the aggregate demand curve? a. An increase in housing prices increases the value of real wealth. b. There is an increase in expected income. c. An increase in the price level increases the value of real wealth. d. The value of the dollar increases. e. There is an increase in the expected price level.
C
Why do shortages develop under a binding price ceiling? a. It encourages buyers to purchase less of the product. b. It encourages sellers to produce more of the product. c. It makes the price so low that the quantity demanded exceeds the quantity supplied in the legal market. d. It encourages sellers to increase the quality of the product they sell, which, in turn, increases the quantity demanded.
C
A shortage occurs whenever: a. the price is above the equilibrium quantity. b. the government places a binding price floor. c. the quantity supplied is greater than the quantity demanded. d. the quantity supplied is less than the quantity demanded.
D
According to the accompanying figure, if the price is $10, there is a: a. surplus of 30 units. b. surplus of 22 units. c. shortage of 30 units. d. surplus of 15 units.
D
An improvement in technology: a. shifts the supply curve to the left. b. allows a producer to decrease output with the same amount of input. c. is one way to shift the demand curve. d. allows a producer to increase output with the same amount of input.
D
Consider the following data that gives the quantity produced and unit price for three different goods across two different years to answer the questions that follow: Assume that the base year is 2012. What was the growth rate of real GDP between the two years? a. 8.3% b. 3% c. 30% d. 20% e. 2%
D
Given current resources and technology, the unattainable range is best described as: a. area I: inside the PPF and points on the PPF. b. only area I: points inside the PPF. c. points on the PPF only. d. only area O: points outside the PPF.
D
In agriculture, a "bumper crop" refers to a particularly productive harvest. If there is a bumper crop for wheat at the same time that more people become allergic to wheat and all else is held constant, what will happen to the equilibrium price and quantity for wheat? a. The equilibrium price will be indeterminate and equilibrium quantity will go down. b. The equilibrium price will be indeterminate and equilibrium quantity will go up. c. The equilibrium price will go up and equilibrium quantity will be indeterminate. d. The equilibrium price will go down and equilibrium quantity will be indeterminate.
D
Inflation occurs: a. when all prices in the economy fall. b. when all prices in the economy rise. c. when the prices of some goods rise and prices of some goods fall, but fewer goods have price increases than decreases. d. when the overall level of prices rises. e. when the prices of some goods rise and prices of some goods fall, but more goods have price increases than decreases.
D
Macroeconomics is the study of: a. individual markets. b. the behavior of the consumer. c. the behavior of the firm. d. changes in national income. e. changes in commodity prices.
D
Many consumer items eventually go out of style, and because fewer people want these items, demand for them drops. When this happens, we usually see production of these items stop. What happens to the equilibrium price and equilibrium quantity in a market like this? a. The equilibrium price goes up and equilibrium quantity goes up. b. The equilibrium price goes up and equilibrium quantity is indeterminate. c. The equilibrium price is indeterminate and equilibrium quantity goes up. d. The equilibrium price is indeterminate and equilibrium quantity goes down.
D
Real GDP is equal to: a. base year prices X base year output. b. current prices X current output. c. current output / base year prices d. base year prices X current output. e. current prices X base year output.
D
Since firms are the primary: a. demanders of loanable funds, they must borrow from the government. b. suppliers of loanable funds, they must lend to households. c. suppliers of loanable funds, they must lend to government. d. demanders of loanable funds, they must borrow from households. e. agents of usury, they must be "reined in" by the people.
D
Suppose advances in computer technology lead to a surge in worker productivity. In the long run, output will _________ and the price level will _________. a. increase; remain unchanged b. remain unchanged; remain unchanged c. increase; increase d. increase; decrease e. decrease; decrease
D
The Federal Reserve System was created in: a. 1945. b. 1776. c. 1863. d. 1913. e. 1975.
D
The basic goal of economics is: a. determining how to distribute all that is produced in an economy. b. controlling the effects of government actions. c. controlling tastes and wishes so that there will be enough resources to produce all the goods and services that people want. d. addressing the scarcity problem created because the population's desire for goods exceeds the ability to produce them.
D
The gap between the real and nominal interest rate represents: a. consumption smoothing. b. a surplus of loanable funds. c. the difference from what the lender receives and the borrower pays. d. the inflationary premium. e. the time preference.
D
The interest rate is: a. the price of labor. b. the marginal rate of investment supply. c. both the price of capital and the price of labor. d. the price of loanable funds. e. the price of land.
D
The nominal interest rate is: a. the rate of interest charged to most large commercial borrowers. b. equal to the real interest rate minus the inflation rate. c. the rate charged on loans for automobiles and other personal loans, but not the rate charged on home loans. d. the interest rate that is not corrected for inflation. e. the interest rate that is corrected for inflation.
D
Use the following example to answer the questions that follow: Imagine that you deposit $25,000 in currency (which you had been storing in your closet), into your checking account at the bank. Assume that this institution has a required reserve ratio of 25%. As a result of this deposit, what is the maximum amount the bank can hold as loans? a. $100,000 b. $25,000 c. $0 d. $18,750 e. $31,250
D
Which of the following is considered discretionary government spending? a. payments to foreign bondholders b. payments to food stamp recipients c. payments to Social Security recipients d. payments to government employees e. payments to unemployment insurance recipients
D
Which of the following would be the theoretical outcome of expansionary fiscal policy in the following aggregate demand-aggregate supply model? a. The aggregate demand (AD) curve would shift from AD1 to AD2. b. The short-run aggregate supply (SRAS) curve would shift from SRAS2 to SRAS1. c. The AD curve would shift from AD1 to AD2 at the same time that the SRAS curve would shift from SRAS1 to SRAS2. d. The AD curve would shift from AD2 to AD1. e. The SRAS curve would shift from SRAS1 to SRAS2.
D
Which of the following would cause a normal good's demand curve to shift to the left? a. The price increases. b. Income increases. c. The price decreases. d. Income decreases.
D
A(n) _____________ in capital goods should ____________ worker productivity. a. increase; have no effect on b. increase; decrease c. decrease; have no effect on d. decrease; increase e. increase; increase
E
Consider the following data, where GDP values are measured in millions of dollars, to answer the questions that follow. What is the value of real GDP in 2010? Round to the nearest second decimal. a. $58,427.20 million b. $445.20 million c. $657.20 million d. $584.27 million e. $520.00 million
E
Inflation creates uncertainty because: a. nominal values of prices and wages are unknown. b. although price confusion problems are eliminated, the shoe-leather costs are exacerbated. c. borrowing continues at a rapid pace, creating a "false boom." d. it rapidly increases output. e. real interest rates, prices, and wages are unknown.
E
Lenders in the loanable funds market consist of: a. arbitrage companies, banks, and firms. b. mutual fund firms, stock exchanges, and banks. c. foreign governments, the domestic government, and households. d. firms and governments. e. households and foreign entities.
E
Lenders in the loanable funds market consist of: a. mutual fund firms, stock exchanges, and banks. b. firms and governments. c. foreign governments, the domestic government, and households. d. arbitrage companies, banks, and firms. e. households and foreign entities.
E
Refer to the following table to answer the questions that follow. Using the table, what is the value of M1? a. $46,500,000 b. $57,500,000 c. $13,500,000 d. $65,000,000 e. $47,500,000
E
Suppose advances in computer technology lead to a surge in worker productivity. In the long run, output will _________ and the price level will _________. a. increase; increase b. increase; remain unchanged c. remain unchanged; remain unchanged d. decrease; decrease e. increase; decrease
E
The largest source of tax revenue for the government is: a. excise taxes. b. social insurance taxes. c. corporate income taxes. d. estate taxes. e. individual income taxes.
E
Use the following table to answer the questions that follow: According to the table, the unemployment rate in this economy is equal to: a. 92.2%. b. 63.4%. c. 4.9%. d. 8.5%. e. 7.8%.
E
Which of the following is most liquid? : a. savings deposits b. small time deposits c. money market mutual funds d. credit cards e. checking deposits
E
Which of the following would be the theoretical outcome of contractionary fiscal policy in the following aggregate demand-aggregate supply model, where LRAS is long-run aggregate supply and SRAS is short-run aggregate supply? a. The AD curve would shift from AD2 to AD1. b. The AD curve would shift from AD1 to AD2 at the same time that the SRAS curve would shift from SRAS1 to SRAS2. c. The short-run aggregate supply (SRAS) curve would shift from SRAS2 to SRAS1. d. The SRAS curve would shift from SRAS1 to SRAS2. e. The aggregate demand (AD) curve would shift from AD1 to AD2.
E
An increase in general resources that affects the production of both goods on a production possibilities frontier (PPF) would cause an: a. outward shift of the PPF. b. inward shift of the PPF. c. outward rotation along the x axis. d. outward rotation along the y axis.
a
Farmer Bill grows wheat and sells it to the miller for $50,000. The miller turns it into flour and sells it to the bakery for $75,000. The bakery uses the flour in the bread that it sells to people for $90,000. The total contribution to GDP is: a. $90,000. b. $50,000. c. $75,000. d. $25,000. e. $215,000.
a
The largest source of tax revenue for the government is: a. excise taxes. b. estate taxes. c. corporate income taxes. d. social insurance taxes. e. individual income taxes.
e
Firms that help to channel funds from savers to borrowers are known as: a. marketers. b. financial intermediaries. c. securities. d. channelers. e. treasury securities.
b
The short-run fluctuations in economic activity that can cause output to be above or below the long-run trend are called: a. economic troughs. b. business cycles. c. economic peaks. d. economic expansions. e. economic contractions.
b
Which of the following would cause a normal good's demand curve to shift to the left? a. The price increases. b. Income decreases. c. The price decreases. d. Income increases.
b
An active monetary policy that attempts to smooth out the business cycle would involve conducting __________ monetary policy during recessions and __________ monetary policy during expansions. a. countercyclical; expansionary b. contractionary; contractionary c. expansionary; contractionary d. contractionary; expansionary e. expansionary; expansionary
c
An opportunity cost is the: a. lowest possible cost. b. highest possible cost. c. cost of a purchase or decision as measured by what is given up. d. cost of finding the lowest price for a product.
c
Between 2006 and 2010, per capita real gross domestic product (GDP) in India grew at an average rate of 7.11% per year. Which of the following factors would have contributed most to this rapid escalation in growth? a. a significant increase in taxes b. decrease in education standards c. restrictions on immigration d. advances in technology e. increases in government regulations
d
In agriculture, a "bumper crop" refers to a particularly productive harvest. If there is a bumper crop for wheat at the same time that more people become allergic to wheat and all else is held constant, what will happen to the equilibrium price and quantity for wheat? a. The equilibrium price will be indeterminate and equilibrium quantity will go up. b. The equilibrium price will be indeterminate and equilibrium quantity will go down. c. The equilibrium price will go up and equilibrium quantity will be indeterminate. d. The equilibrium price will go down and equilibrium quantity will be indeterminate.
d
The nominal interest rate is: a. equal to the real interest rate minus the inflation rate. b. the rate of interest charged to most large commercial borrowers. c. the interest rate that is corrected for inflation. d. the rate charged on loans for automobiles and other personal loans, but not the rate charged on home loans. e. the interest rate that is not corrected for inflation.
e