ECON101 Fall 05 Ahn Exam2

ECON101 Fall 05 Ahn Exam2 - Department of Economics San...

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Unformatted text preview: Department of Economics San Diego State University Economics 101 2 PM — 3:15 PM Ahn Exam 2'. Please properly fill in your scantron form with a #2 pencil. If you are caught cheating, you will fail this course. While calculators are permitted, cell phones and other “smart devices ” are not; please turn off such devices at this time. 1. The key indicator of a country's living standard and economic well being is: a) the interest rate ' b) the inflation rate c) nominal GDP eal GDP per person e nominal GDP per person 2. The payment of interest not only on the original deposit, but on all previously accumulated interest is 'called: a) the real interest rate b) the nominal interest rate c) simple interest a conflict of interest ompound interest 3. Small differences in annual growth rates of real GDP generate large differences in real GDP overtime because of the: .- importance of average labor productivity ower of compound interest 0) diminishing returns to capital (1) increasing returns to scale e) limits of economic growth 4. Government policies that increase the long-term economic growth rate by a small - - ount result in in average living standards. by ge increases 13) small increases c) small decreases d) no change e) either larger or small increases 11. Assets are: a) current income minus spending on current needs b) the debts one owes c) saving minus investment Qanything of value one owns e) stocks, bonds, and credit card balances 12. A measure defined at a point in time is called a(n) . a) real variable I b) nominal variable c) aggregate variable (1 flow Q ock 13. Capital gains are: a) increases in the flow of investment ‘0) increases in the flow of saving additions to plant and equipment @ncreases in the value of existing assets e decreases in the value of existing assets 14. Jacque is saving more while she is young so she will have plenty of money to pay country club fees when she plays golf during her retirement. This is an example of otive for saving. C a) lite-cycle b public 0) private d) precautionary e) bequest 15. National saving equals: _ a)C+I+G —C—G c +C+G d)Y—C—I e)Y—C—I—G 16. Any asset used to make purchases is: a) a bond b) a stock c) a deposit oney BCOIDC 22. A firm produces chairs that sell for $10/unit. The following table provides information about how many chairs can be produced per hour. ed/hour 10 18 24 28 30 How many workers will be hired, if the hourly wage for workers is $30? a)1 O 1:); 0i w d) 2 e 5 5 (Z 23. Jay owns a classic car he purchased for $$000 Alf-g rally he is offered $75,000 for the car. Based on this information: a) Jay’s saving this year has increased by $25, 0 3 O a Q @ay’s saving this year has decreased by $25,000 ay has a $25,000 capital gain Ja has a $25,000 ca ital loss $ fl ..._ _ ‘ y P : $3!) e) Jay’s wealth is unchanged 3 BLUFV a 24. If bank reserves are 200, the public hold urrenCYa and the desirem 1 reserve/deposit ratio is .25, the deposits are and the money supply is a) 200; 600 b) 400; 300 :l/ 600; 1000 2W @WON‘Q/ 00; 1200 ' - W ‘6 2400; 2800 RQWMQ/MPQ‘DW 2 WW 3/ 123330 :4 0’2. gm the following information, private saving is 5?: and national saving is Co sumption=3000 I 2370 ) Government budget surplus = 500 Government transfers and interest payments = 750 Government tax collections : 1,750 GDP = 6000 my a) 1,500; 2,500 3 b) 1,250; 1,750 1,250; 2,250 W d) ,000; 2,500 *j e ,000; 3,500 a \ (1630’ 5. In symbolic terms, where Y = real GDP, POP = total population, and N = the number of employed workers, Y/POP must equal: a) [N * N/POP I N/Y c) Y/POP * N/POP d) N/Y * N/POP e) Y/N * POP/N 6. In the United States, there is evidence of: a) a decline in real wages b) a slowdown in job creation yucreasing wage inequality increase wage equality e) a decrease in the proportion of the population over 16 employed 7. One trend in labor markets is: increase in average real wages in the United States and other industrial nations . increasing wage equality in the United States c) strong rates of job creation in Western Europe d) low rates of unemployment in Western Europe e) very slow rates of employment growth in the United States 8. The extra production gained by employing one more worker is called the: a) real wage b) nominal wage waginal product surplus product e) opportunity cost 9. Firms will hire additional workers as long as the wage: a) is less than the marginal product of labor b) equals the marginal product of labor is greater than the marginal product of labor $5 less than the value of the marginal product of labor e) is greater than the value of the marginal product of labor 10. The demand for labor decreases when the: a) nominal wage decreases b) real wage decreases e) value of the marginal product of labor increases %Ialue of the marginal product of labor decreases e) price of the output produced by labor increases \ lh7. 100% reserve banking refers to a situation in which bank’s reserves equal 100% of t eir: ' ' loans fideposits c) profits (1) income e) money 18. Commercial banks create new money: a) by printing currency b) by issuing checks 0) through multiple rounds of lending and borrowing When they buy government bonds from the Fed e when they increase their desired reserve/deposit ratio 19. The central bank of the United States is: a) Bank of America b) Bank of the United States c) Bank One We Federal Reserve System e) ells Fargo 20. The Federal Open Market Committee makes decisiongfibout “AV/W I monetary X] b lscal , 51/ c) banking M d) deposit insurance 93" e) structural N i E I Problems annual rate of interest, th or 50 years your deposit would total: a) 2,650 Q W i 7— ‘“ M l b) 10,000 6% . we I O W a c) 18,420 @6050 w e 50,750 “ A“; I 913 U 21. If you left $2,500 on depoiit with a bank promising to pay you a 6% compound ...
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ECON101 Fall 05 Ahn Exam2 - Department of Economics San...

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