Economics 1301 Final

all of the following shift the investment line except:

real interest rates

the gov raises the min wage. if there are already unemployed people in the economy, we would expect the unemployment rate to:

rise

if the financial account balance is $2 trillion, then what is the current account balance

-$2 trillion

The 1990s was a period of rapid economic growth and a robust stock market that yielded an average annual return of 18.6%! If you invested $1,000 at the beginning of the decade, and you reinvested the interest you earned every year, calculate the value of your investment at the end of the decade.

5,506.14

using the table below, what is the opportunity cost of reducing unemployment from 8% to 4%?

6 percentage points of inflation

which individual is considered the father of economics?

adam smith

the is curve is constructed by

adding up the level of aggregate expenditure at each real interest rate

when consumers become pessimistic about the state of the economy, the consumption function will shift

downward/out

the demand curve demonstrates how much a consumer wants a good or service.

false

each of the following markets are considered factor markets except

goods

in the talk by steven levitt (author of Freakonomics), he discusses supply and demand in what vancouver market?

housing

which of the following is not included in the macro level production function?

income

if a spending shock reduces aggregate expenditure by $40 billion and the multiplier is 2, then the IS curve will shift ---- by ---- billion USD$.

left, 80

which LDC country was presented in class week 14

madagascar

an efficient market will keep increasing production until:

marginal benefit equals marginal cost

all of the following cause a shift in the demand curve except:

price

which of the following is not a component of GDP?

price

several states have a minimum wage that is higher than the federal minimum. in those states that impose such a minimum wage, it is more likely that the minimum wage acts as a binding:

price floor, causing excess supply in the market

when the government increases spending, a multiplier effect will

shift the AD curve further to the left than the effect of the spending

a(n) ---- occurs when the quantity demanded exceeds the quantity supplied.

shortage

which of the following is not one of the functions of money?

standard of well being

in the AD-AS framework, price and quantity are represented by ----, respectively

the GDP deflator and the real GDP

according to the rational rule, which of the following statements is false?

the rationale rule is an important part of the cost-benefit principle

economists assume trade makes everyone better off.

true

who has a comparative advantage in mowing lawns?

tyrone because he has a lower opportunity cost

what is measured on the y-axis on the (S&W) Phillips curve diagram?

unexpected inflation

what is the opportunity cost of the Australian miner of mining 1 metric ton of manganese?

0 (with margin: 0) 2 (with margin: 0)

imagine you work in an animal shelter with your friend, Olivia. based on the table below, what is olivias opportunity cost of moving cat food?

1

which of the following causes shifts in the MP curve?

changes in monetary policy

for normal goods,

when income rises, demand rises

devina lost her job a while ago when the economy contracted. she no longer believes she can get a job and has lost hope of employment. she has several friends in the same scenario. they have all stopped looking for work. this scenario describes:

discouraged workers

an underemployed person is one who is

working but whose skills are not fully utilized

how many stages are in the business cycle?

4

suppose that the federal reserve has recently cut interest rates in the economy and there is a credible forecast that the fed will again cut interest rates in the future. a manager who is IS-MP savvy will expect that:

GDP in the economy will rise and sales will increase in the future

in the IS-MP analysis in the Fed model, contractionary fiscal policy will shift the:

IS curve to the left

which of the following is a final good or service?

a haircut

according to explained, what is the primary reason for the gender wage gap?

care responsibilities

which of the following is not included in GDP?

carrots grown in your garden and eaten by your family

the marginal propensity to consume is calculated as the

change in consumption divided by the change in income

Keynesian (or short- run) economists tend to focus their analysis on:

consumers

aggregate expenditure is the sum of

consumption, planned investment, government expenditure, and net exports

which of the following shows the medium of exchange function of money?

daniela goes to the store and purchases roses with US dollars

a bank can make profit by:

giving you a particular interest return on your savings and then loaning out the same money at a higher rate of interest

according to the most recent BEA GDP release, which of the aided in the increase in personal consumption expenditures (PCE)?

increases in food services

according to the ---- theory, a market economy will tend to allocate resources efficiently through the price mechanism.

invisible hand

which of the following is NOT an argument for limiting international trade? an increase in international trade may:

lead to economic growth specialization in comparative advantages

a fall in the real interest rate causes

movement down and to the right along the same IS curve

a movement along the supply curve is caused by a change in:

price

in the market for loanable funds, the supply curve represents

saving

primarily economics is the study of

scarcity