08SM1ans - Economics 502.01 Professor McCaffertv S....

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Professor S. McCaffertv Economics 502.01 Midterm Examination I Spring,2008 4r-r SUgeS Name: Directions: Answer all questions. There are two sections to this exam. Part I: Multiple Choice. Each question is worth two (2) points. Please circle the letter corresponding to the best answer. 1. In analyzing macroeconomic data during the past year, you have discovered that average labor productivity fell, but total output increased. What was most likely to have caused this? a.) There is nothing unusual in this outcome because this is what normally occurs. b.) The capital/output ratio probably rose. @ nt"t"was an increase in labor input. d.) Unemployment probably increased. 2. Which of the following best describes a typical business cycle? @ E"o.romic expansions are followed by economic contractions. b.) Inflation is followed by unemployment. c.) Trade surpluses are followed by trade deficits. d.) Stagflation is followed by inflationary economic growth. 3. Before World War II, the average level of prices in the United States usually a.) fell during wartime and rose during peacetime. b.) fell during wartime and fell during peacetime. (c.) rose during wartime and fell during peacetime. d.) rose during wartime and rose during peacetime. 4. U.S. imports are goods and services
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5. Why were the U.S. government budget deficits of the 1980s and early 1990s so unusual from a historical point of view? a.) It was the first time the U.S. government had ever nm deficits. @ tn the past, deficits were usually that large only in wartime. c.) It was the first time that deficits were accompanied by very high rates of inflation. d.) It was the first time that deficits diverted funds from other productive uses, such as investment in modern equipment. 6. The value of a producer's output minus the value of the inputs it purchases from other producers is called the producer's a.) surplus. b.) profit. (c) value added. d.) gross product. 7. The equation total production : total income: total expenditure is called a.) the goods-market equilibrium condition. b.) the total identity. @ ,n"fundamental identity of national income accounting. d.) Say's Law. 8. Because government services are not sold in markets, a.) they are excluded from measurements of GDP. b.) the government tries to estimate their market value and uses this to measure the government's contribution
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This note was uploaded on 07/17/2008 for the course ECON 502.01 taught by Professor Mccafferty during the Spring '08 term at Ohio State.

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08SM1ans - Economics 502.01 Professor McCaffertv S....

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