Econ midterm - Name_ Midterm (100 points in total) Multiple...

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Name__________ Midterm (100 points in total) Multiple Choice (2 points for each, 40 in total) Put your answers here 1-5 _________________ 6-10 ____________________ 11-15 _________________ 16-20 ____________________ ____ 1. Which of the following is not included in GDP? a. unpaid cleaning and maintenance of houses b. services such as those provided by lawyers and hair stylists c. the estimated rental value of owner-occupied housing d. production of foreign citizens living in the United States ____ 2. Real GDP a. evaluates current production at current prices. b. evaluates current production at the prices that prevailed in some specific year in the past. c. is not a valid measure of the economy's performance, since prices change from year to year. d. is a measure of the value of goods only; it excludes the value of services. Table 24-1 year Peaches Pecans 2005 $11 per bushel $6 per bushel 2006 $9 per bushel $10 per bushel ____ 3. Refer to Table 24-1 . Suppose the typical consumer basket consists of 10 bushels of peaches and 15 bushels of pecans. Using 2005 as the base year, the CPI for 2006 is a. 100. b. 120. c. 200. d. 240. ____ 4. If the price index was 90 in year 1, 100 in year 2, and 95 in year 3, then the economy experienced a. 10 percent inflation between years 1 and 2 ,and 5 percent inflation between years 2 and 3. b. 10 percent inflation between years 1 and 2, and 5 percent deflation between years 2 and 3. c. 11.1 percent inflation between years 1 and 2, and 5 percent inflation between years 2 and
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3. d. 11.1 percent inflation between years 1 and 2, and 5 percent deflation between years 2 and 3. ____ 5. In 2004, Freedonia had a population of 2,700 and real GDP of about 11,610,000. In 2005 it had a population of 2,500 and real GDP of about 10,000,000. What was the approximate growth rate of real GDP per person in Freedonia between 2004 and 2005? a. 7.5 percent b. 12.5 percent c. 20.5 percent d. 35.5 percent ____ 6. If the supply for loanable funds shifts left, the equilibrium interest rate a. and quantity of loanable funds rise. b. and quantity of loanable funds fall. c. rises and the quantity of loanable funds falls. d. falls and the quantity of loanable funds rises. ____ 7. What would happen in the market for loanable funds if the government were to decrease the tax rate on in- terest income? a. The supply of and demand for loanable funds would shift right. b. The supply of and demand for loanable funds would shift left. c. The supply of loanable funds would shift right and the demand for loanable funds would shift left. d. None of the above is correct. ____ 8. Suppose a country repealed its investment tax credit. The effects of this are represented by shifting the a. demand for and the supply of loanable funds to the right. b.
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Econ midterm - Name_ Midterm (100 points in total) Multiple...

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