86 terms

# Econ Final-Tests

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B. Shift to the left
If Steven's income decreases and, as a result, he choose to buy fewer bagels per month at each price, then his demand curve will
C. A rightward shift of a supply curve
An increase in supply is represented by
A. 1/5 table for Mike and 1/3 table for Sandy
Mile and Sandy are two woodworkers who both make tables and chairs. In one month, Mike can make 4 tables or 20 chairs, where sandy can make 6 tables or 18 chairs. Given this, we know that the opportunity cost of 1 chair is
D. (300 huts, 60,000 bowls) and (200 huts, 80,000 bowls)
Assume for Namibia that the opportunity cost of each hut is 200 bowls. Then which of these pairs of points could be on Namibia's ppf
C. Gather data from historical episodes of economic change
Instead of conducting laboratory experiments to generate data to test their theories, economist often
C. 100
The following table contains some production possibilities for an economy for a given month.
A. Scarcity
Economics deals primary with the concept of
A. higher wages for carpenters, higher wood prices, increase in consumer incomes, higher apartment rents, increases in population, and expectations of higher house prices in the future
Which of the following sets of events would most likely cause an increase in the price of a new house
B. With trade, one country wins and one country loses
Which of the following statements is false.
A. Lower than his or her opportunity cost of that good
Two people can benefit from specialization and trade by obtaining a good at a price that is
B. Productivity Levels
The fact that different countries experience different standards of living is largely explained by differences in those countries'
C. \$20
Refer to Table 4-6. If only members are allowed to purchase tickets to this year's celebrity gold tournament, then what will be the equilibrium price
B. A surplus of 300 tickets
If both members and non-members are allowed to purchase tickets to this year's celebrity golf tournament and the country club sets the ticket price at \$30, then there will be
A. -5/2
Refer to Figure 2-13. The slope of the curve between points A and B is
B. A change in income
Refer to Figure 2-13. The movement from point B to point C could have been caused by
A. Benefit both Jayson and Regan
Regan grows flowers and makes ceramic vases. Jayson also grows flowers and makes ceramic vases, but Regain is better at producing both goods. In this case, trade could
A. Belarus should export linen to Russia
Belarus has a comparative advantage in the production of linen, but Russia has an absolute advantage in the production of linen. If these two countries decide to trade,
C. All nonprice determinants of demand are held constant
When we move along a given demand curve,
C. Perfect competition
The highest form of competition is called
A. Universal health care would be good for U.S. citizens
Which of the following is an example of a normative, as opposed to positive, statement
A. 0
The following table contains a demand schedule for a good. If the law of demand applies to this good, the "?" could be
D. Downward sloping, and we say the variables are negatively related
When two variables move in opposite directions, the curve relating them is
C. A local cable television company
Which of the following would most likely serve as an example of monopoly
C. Understand that the opportunity cost of attending college is very high
High-school athletes who skip college to become professional athletes
C. Quantity will fail and the effect on price is ambiguous
What will happen to the equilibrium prices and quantity of new cars if the price of gasoline rises, the price of steel rises, public transportation becomes cheaper and more comfortable, and auto-workers negotiate higher wages
D. 1.046 If the exchange rate is less than this, it costs fewer dollars to buy a tall-latte in the U.S. than in the Euro area.
If Starbucks tall-latte cost \$2.80 in the US and 2.93 Euros, then purchasing-power parity implies the nominal exchange rate is how many euros per dollar
D. Ben Bernanke
Who was appointed chairman of the Board of Governors in 2005 by G. Bush
A. Are fiat money and gold coins are commodity money
Paper dollars
A. Falls, and people desire to hold more of it
As the price level rises, the value of money
C. Decrease U.S. net capital outflow, but increase Greek net capital outflow
Bob, a Greek citizen, opens a restaurant in Chicago. His expenditures
D. The nation's monetary prices is made by the FOMC, which meets about every six weeks
At the Federal Reserve,
B. 750.00
If velocity =5, the price level =1.5, and the real value of output is 2,500, then the quantity of money is
B. real wages and real GDP
According to the classical dichotomy, which of the following is not influenced by monetary factors
C. Falls, so the value of money falls
If the Fed increases the money supply, the 1/P
A. The equilibrium price level increases
Refer to Figure 30-1. When the money supply curve shifts from MS1 to MS2,
A. The quantity of money supplied is greater than the quantity of money demanded
Refer to Figure 30-1. IF the money supply is MS2 and the value of money is 2, then
C. The US has a trade surplus of \$50 billion
If US exports are \$150 and US imports and \$100 billion, which of the following is correct
D. All of the above are correct
To decrease the money supply, the Fed could
A. The money supply increase and the federal funds rate decreases
When the Fed buys government bonds
D. More frequent price changes. This raises their menu costs
When inflation rises, firms make
A. A trade surplus and positive net exports
A country sells more to foreign countries than it buys from them. It has
B. The purchasing power of the dollar is the same in the US as in foreign countries
Which of the following does the PPP imply?
A. 5 yuan
In the US a candy bar cost \$1. The nominal exchange rate is 6 Chinese yuan per dollar. If the real exchange rate is 1.2, then, what is the price of a candy bar in China
C. The nominal interest rate rises, but the real interest rate does not
Under the assumption of the Fisher effect and monetary neutrality, if the money supply growth rate rises, then
C. The Fed does not control the amount of money that households choose to hold as deposits in banks
A problem that the Fed faces when it attempts to control the money supply is that
A. Monetary policy
Decisions by policymakers concerning the money supply constitute
A. \$50 billion of exports and \$41 billion of imports
If a country has net exports of \$9 billion and sold \$50 billion of goods and services abroad, then it has
C. Prices in the US were higher, or prices in Israel were lower
Other things the same, which of the following would both increase the US real exchange rate
B. Purchases of foreign assets and sales of goods and services abroad
Net capital outflow equals the difference in a country's
B. 37.5%
If \$300 of new reserves generates \$800 of new money in the economy, then the reserve ratio is
C. Saving is greater than domestic investment and Y>C+I+G
If a country has a trade surplus, then its
C. Percentage change in the cpi
Inflation can be measured by the
If the exchange rate were .8 Canadian dollars per US dollar, a watch that costs \$8 US dollars would cost
A. 4
According to the quantity equation, if P=2, Y=6,000, and M=3,000 then V=
B. 5/4
The exchange rate is 1.5 Bosnian markas per US dollar. The price of a fridge in Bosnia is 1,200 markas while in the US is \$1,000. The real exchange rate is
A. 4.5%
If the nominal interest rate is 8% and expected inflation is 3.5%, then what is the real interest rate
C. \$200
Suppose a bank's reserve ratio is 10% and the bank has \$2,000 in deposits. It reserves amount to
B. More than \$14 per hour, so as to attract a better pool of applicants
Ellen decides to hire some additional workers for her vinyl siding factory. The equilibrium wage is \$14 per hour. Efficiency wage theory suggests that it is reasonable for Ellen to offer
B. 2.5%
The CPI was 225 in 2006 and 234 in 2007. The nominal interest rate during this period was 6.5%. What was the real interest rate during this period
B. National Saving
In a closed economy, what remains after paying for consumption and government purchases
D. \$2 trillion and \$1 trillion, respectively
For a closed economy, GDP is \$11 trillion, consumption is \$7 trillion, taxes are \$2 trillion and the government runs a deficit of \$1 trillion. What are private saving and national saving
D. 9.1% deflation between the first and second years, 4% deflation between the second and third years
The price index was 110 in the first year, 100 in the second year, and 96 in the third year. The economy experienced
C. Bond A has a term of 20 years and Bond B has a term of 2 years
We would expect the interest rate on Bond A to be higher than the interest rate on Bond B if the two bonds have identical characteristics except that
A. How fast the number of dollars in your bank account rises over time
The nominal interest rate tells you
D. Productivity
The one variable that stands out as the most significant explanation of large variations in living standards around the world is
B. GDP is unaffected because previously the rent payments were included in GDP and now the rent payments are replaced by GDP by the estimate of the value of housing services
Suppose an apartment complex converts to a condominium, so that the former renters are now owners of their housing units. Suppose further that a current estimate of the value of condominium owners' housing services is the same as the rent they previously paid. What happens to GDP as a result of this conversion
A. 9.5%
Suppose that the adult population is 6 million, the number is employed is 3.8 million, and the labor-force participation rate is 70%. What is the unemployment rate?
A. \$75,000; thus, Ruben's purchasing power increased between 2001 and 2006
Ruben earned a salary of\$60,000 in 2001 and \$80,000 in 2006. The CPI was 177 in 2001 and 221.25 in 2006. Ruben's 2001 salary in 2006 dollars is
B. Neither the first nor the second
A country with a relatively low level of real GDP per person is considering adopting two polices to promote economic growth. The first is to increase barriers to trade. The second is to restrict foreign portfolio investment. Which of these polices would most economist think would promote growth.
B. Mariah builds a new coffee shop
Which of the following would a macroeconomist consider as investment
B. Market prices
In order to include many different goods and services in an aggregate measure, GDP is computed using
C. Raises wages and lowers employment in that industry
The introduction of a union into an industry
C. The demand for loanable funds would shift rightward, initially creating a shortage of loanable funds at the original interest rate
Suppose the US offered a tax credit for firms that built new factories in the US. Then
C. Tuuli, who is waiting for her new job to start
Who of the following would be included in the Bureau of Labor Statistics' "unemployed" category
C. Inflation was 25% and output did not grow
Refer to Table 23-6. From 1975 to 1976
C. A typical consumer
The CPI is a measure of the overall cost of the goods and services bought by
A. In Feb. 2007, Amanda buys a tick to visit a zoo in Florida. She visits the zoo in April 2007
Which of the following events would cause GDP for 2007 to increase
D. The value of the cars in the inventory will be counted as part of 2006 GDP, and the value of the cars sold in 2007 will not increase 2007 GDP
The local Chevy dealership has an increase in inventory of 25 cars in 2006. In 2007, it sells all 25 cars. Which of the following statements is correct?
C. 1
Senator Noitall says that in order to help poor countries develop, the US should: 1 Prevent US corporations from investing in poor countries because they take profits that the poor countries should have; 2. Not import goods from poor countries that use child labor; 3. Work to promote political stability in poor countries; and 4. Reduce poor countries' reliance on market forces in their economies. How many of these ideas are likely to help poor countries grow
C. The poor country has poorly developed property rights
Some poor countries appear to be falling behind rather than catching up with rich countries. Which of the following could explain the failure of a poor country to catch up
B. Are counted as unemployed but should be counted as out of the labor force
Discouraged workers
B. Risk of deflation
As of October 2010, what is the US economists' main concern about US inflation rate in the near future
The U.S. dollar exchange rate, The US trade deficit, Local investment and saving in the US
The importance of interest rate in the US comes from the fact that it does influence
C. The U.S. central bank
The US authority that determines the interest rate is the US is
A. Control the appreciation in the value of the Japanese Yen and promote Japanese exports
Recently the Japanese government intervenes in the currency market by selling Japanese Yen and buying US dollar in order to
C. Force the Chinese government to float the exchange rate of their currency which is undervalued as of today
Recently the US congress passed a bill reflects the US concern about the China's currency practices. The US goal behind passing such a bill is