ECN201 Old Exam 1 with answers

ECN201 Old Exam 1 with answers - ECN201 Exam 1 Fall 2007 v1...

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ECN201 Exam 1 Fall 2007 v1 1. There was a story recently about the HUGE salaries earned by some stars in the Hedge Fund and Private Equity businesses and the impact this had on MBA programs. How would we demonstrate the dramatic increase in earnings of people without an MBA degree on the market for MBA degrees? a. the demand curve would shift out b. the demand curve would shift in c. the supply curve would shift in d. the supply curve would shift out 2. Which of the following statements is a good example of the concept of opportunity cost? a. The rising cost of gas has increased the cost of driving b. Wages for computer programmers declined sharply after Y2K c. The cost of college declined as the earnings of high school graduates declined d. The cost of traveling abroad rose sharply as the value of the US $ dropped Use the following graph to answer the next question. 3. The headline read, "Stock prices surge on news of [interest] rate cut" If this is a rather well established relationship between interest rates and the value of the stock market, then which of the graphs above would best capture this relationship between the value of the US $ (Y) and interest rates (X)? a. a b. b c. c d. d 4. What was it that was so impressive about the capitalist economic system promoted by Adam Smith in his book The Wealth of Nations? He clearly was not a utopian who promised everything. Capitalism had its plusses and minuses, and among the BIG plusses you would find that Smith offered a view of a world that would experience for the first time____. a. stability b. harmony c. equality d. growth
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left much of the rest of the world far behind. One of the explanations of the dramatic growth has to do with the appearance of an economic system that fosters economic growth. That economic system was ____. a. command b. capitalism c. tradition d. communism 6. "We have come to recognize that forces not within the control of the poor contribute to their poverty. . ... Public assistance, then, is not mere charity, but a means to "promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity." This quote from a Supreme Court decision clearly reflects the sentiments of ____. a. conservatives b. liberals c. libertarians d. Marxists e. evolutionaries 7. Above you see a graph of the price of gold and it is clear that something happened in 1980. What happened was that investors got nervous about the world economy, and when this happens investors tend to decide to increase their holdings of gold. What would be the best way to demonstrate this dramatic increase in the price of gold? \ a. the demand curve would shift in b. the demand curve would shift out c. the supply curve would shift in
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ECN201 Old Exam 1 with answers - ECN201 Exam 1 Fall 2007 v1...

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