TCC Economics Mid-Term Exam
The identity that shows that total income and total expenditure are equal is...
Y=C+I+G+NX
Which of the following equations represents GDP for an open economy?
Y=C+I+G+NX
Cyclical unemployment refers to...
short-run fluctuations around the natural rate of unemployment
Most economists use the aggregate demand and aggregate supply model primarily to analyze...
short-run fluctuations in the economy
We associate the term debt finance with...
the bond market, and we associate the term equity finance with the stock market
The field of finance primarily studies...
the implications of time and risk for allocating resources over time
What is the present value of a payment of $1000 two years from now if the interest rate is 6%?
$1000/(1.06)^2
What is the present value of a payment of $2000 to be received two years from today if the interest rate is 5%?
$1814.06
If the interest rate is 7.5%, then what is the present value of $4000 to be received in 6 years?
$2,591.85
You received $2000 today which you plan to save for 15 years. If the interest rate is 4%, what is the future value of this $2000?
$3,601.89
If the interest rate is 2.49%, then what is the present value of $5000 to be received in 4 years?
$4,531.52
Suppose you put $500 into a bank account today. Interest is paid annually and the annual interest rate is 3%. The future value of the $500 after 1 year is...
$515.00
The future value of $500 saved for two years at an interest rate of 5% is...
$551.25
Suppose you put $500 into a bank account today. Interest is paid annually and the annual interest rate is 3%. The future value of the $500 in 5 years to the nearest cent is...
$579.64
Suppose you put $500 into a bank account today. Interest is paid annually and the annual interest rate is 8%. The future value of the $500 after 2 years is...
$583.20
What is the present value of a payment of $100 one year from today if the interest rate is 5%?
$95.24
Which of the following is the correct way to compute the future value of $X that earns r percent interest for N years?
$X(1+r)N
Measuring unemployment is the job of the...
Bureau of Labor Statistics
The Bureau of Labor Statistics is part of the U.S. Department of...
Labor
Who of the following would be included in the Bureau of Labor Statistics "unemployed" category?
Miguel, who is on temporary layoff
What is the present value of a payment of $150 one year from today if the interest rate is 6%?
None of the above are correct to the nearest cent.
Which of the following is correct?
When real GDP falls, the rate of unemployment rises
Who of the following are included in the Bureau of Labor Statistics "employed" category?
all of the above
Which of the following explains why production rises in most years?
all of the above are correct
Real GDP...
all of the above is correct
The curve that shows the quantity of goods and services that firms produce and sell...
as it relates to the quantity of goods and services that buyers want to buy is called the aggregate-supply curve
Two of the economy's most important financial intermediaries are
banks and mutual funds
When opening a print shop you need to buy printers, computers, furniture, and similar items. Economists call these expenditures...
capital investment
Other things the same, an increase in the interest rate makes the quantity of loan-able funds demanded...
fall, and investment spending fall
Other things the same, an increase in the interest rate makes the quantity of loan-able funds supplied...
fall, and investment spending fall
During a recession, the economy experiences...
falling employment and income
Institutions that help match one person's saving with another person's investment are collectively called the...
financial system
The aggregate-demand curve shows that a decrease in the price level...
increases the real value of goods and services demanded in the economy
Compounding refers directly to
interest being earned on previously-earned interest
The concept of present value helps explain why...
investment decreases when the interest rate increases, and it also helps explain why the quantity of loan-able funds demanded decreases when the interest rate increases.
The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of households called the...
labor survey
Other things the same, an increase in the price level makes the dollars people hold worth...
less, so they can buy less
The primary economic function of the financial system is to...
match one person's saving with another person's investment
When a country saves a larger portion of its GDP than it did before, it will have...
more capital and higher productivity
The amount of unemployment that an economy normally experiences is called the...
natural rate of unemployment
The model of aggregate demand and aggregate supple explains the relationship between...
real GDP and the price level
A relatively mild period of falling incomes and rising unemployment is called an...
recession
If the price level falls, the real value of a dollar...
rises, so people will want to buy more
Allen Steel Company is considering whether to build a new mill. If the interest rate rises...
the present value of the returns from the mill will fall, so Allen will be less likely to build the mill
Aggregate demand includes...(2)
the quantity of goods and services households, firms, the government, and customer abroad want to buy
Aggregate demand includes...
the quantity of goods and services the government, households, firms, and customers abroad want to buy
Unemployment data are collected...
through a regular survey of about 60,000 households
Most financial decisions involve two related elements:
time and risk
Which of the following typically rises during recession?
unemployment