econ 202 exam two

Have an economy is growing at 10%, how long will take for $1,000 to turn into $4,000

14 years

Which of the following is true about hyperinflation?

Financial assets in a hyperinflated currency quickly become worthless

Which of the following combinations would result in the most economic freedom?

Free trade, competitive markets, and limited regulations

Which of the following is a critical dilemma when implementing fiscal policy in reference to timing lags?

The economy might already be in recovery before fiscal policy is enacted

Which of the following statements about environmental quality and economic activity is true?

Wealthier countries tend to value environmental quality more than developing countries

When economists warn about the crowding-out effect, they are referring to:

When government borrowing reduces private investment

A guitar is produced in California using $100 and raw materials and sells for $300 and guitar shop. Each guitar that is produced contributes _________ to US GDP

$300

If the marginal propensity to save is 0.2 and income rises by $5,000, much of this $5,000 will be consumed?

$4,000

If the prices index is 200, how much did a $12 pizza (today) cost in the base year?

$6.00

If a country increases the amount of goods it imports but it exports remain unchanged:

AD shifts left

If business expectations become less favorable, what will likely happen to the AD curve?

AD shifts left

If the government raises taxes, what will this do to the AD curve?

AD shifts left

What does the 45-degree line in aggregate expenditures model represent?

All consumption and no saving

What does the "paradox of thrift" say?

An economy that saves too much can end up with lower total savings

In the following PPF, between which two points would short-run growth be represented?

B to C

Yeah why are the components of aggregate expenditures

C + I + G + (X-M)

Which of the following is snot considered an example of one of the four main factors of production?

Cash bonds

Which effect best explains why Ethiopia (a poor country) is able to achieve a high growth rate while Japan (a rich country) struggles with low growth

Catch-up effect

Which of the following would likely not cause inflation?

Consumer confidence falls due to global economic concerns

Reducing government spending, reducing transfer payments, or raising taxes describes which policy?

Contractionary fiscal policy

automatic stabilizers have _________ effects during times of economic prosperity and _________ effects during times of economic downturn

Contractionary; expansionary

What is the one major category that separates national debt from public debt?

Debt held by other government agencies

A temporary rise in the price of agricultural crops due to drought is likely to cause a(n):

Decrease in the short-run aggregate supply

Which of the following is specifically designed to increase the long-run aggregate supply curve?

Developing new technologies

When the increase in prices goes from 5% to 2%, this is referred to as:

Disinflation

GDP measures the final value of goods and services produced to avoid the problem of:

Double counting

Which of the following persons is considered unemployed?

Emily has not worked for two months, but still applies for jobs for every week

If Chuck gets laid off from a high paying job in temporarily works as a Uber driver, he's considered:

Employed

The balanced budget multiplier is:

Equal to 1

In the formula for GDP (GDP = C + I + G + (X - M), what does X represent?

Exports

The provision of Pell Grants and the G.I Bill are examples of government investment in:

Human capital

Which of the following are considered withdrawals from an economy?

Imports; taxes; savings

What is the single most important factor influencing economic growth for an economy:

Increased productivity

What occurs when spending is above the full employment level?

Inflationary gap

If the real GDP at full employment is $5 billion while current GDP is $6 billion, a(n) _________ exists, and will require a __________ in spending to bring the economy back to full employment

Inflationary gap; decrease

Which of the following is not true regarding the informal economy?

Informal market activities do not contribute to the standard of living of citizens

If AD shifts right as the economy booms, and then SRAS shifts left, what happens to inflation?

It increases

Which of the following persons is considered part of the labor force?

Joe, A senior in high school who works part-time on weekends at the ice cream shop

Which of the following curves is vertical?

Long-run aggregate supply

All of the following programs are considered mandatory spending expect:

National defense

If the economy is above long-run equilibrium output, what will happen in the long run if SRAS adjusts?

Prices rise and output decreases

What is the best measure of economic growth and standards of living in a country?

Real GDP per capita

Which of the following is a form of US public debt?

Savings bonds

Which of the following two things can people do with money received as disposable personal income?

Spend money or put it into savings

Which factor of production enhances the productive capillary of all other resources in the production function?

Technology

The "wealth effect" refers to the fact that when aggregate prices level rise:

The real value of savings accounts, bonds, and cash declines

When the economy hits the bottom of the business cycle this is called as:

Trough

Increased taxes will shift the aggregate demand curve to the ________ and ________ output demanded:

left; decrease

Which of the following sequences is in the correct order according to the business cycle?

peak; recession; trough; recovery

frictional unemployment is:

short-term unemployment that is associated with the people who are switching jobs