ECON 203 test2

ECON 203 test2 - ID: A Econ 203 Exam 2 (Spring 2007)...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
ID: A 1 Econ 203 Exam 2 (Spring 2007) Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. Which of the following lowers an economy's natural rate of unemployment? a. An increase in the number of weeks for which a worker can collect unemployment insurance d. The economy entering a recession b. More efficient job search through use of the Internet e. All of the above c. An increase in the minimum wage 2. Why might some firms voluntarily pay workers a wage above the market equilibrium? I. Paying higher wages causes worker turnover to decrease. II. Paying higher wages increases the number of job applicants. III. Paying higher wages allows employees to purchase enough food to be healthy. IV. Paying higher wages encourages workers to be more productive. a. II, III, and IV only d. I, II, III, and IV b. I and II only e. III, and IV only c. IV only 3. Interest rates and investment rise. Which of the following could explain these changes? a. the government runs a larger deficit b. the government institutes an investment tax credit c. the government replaces the income tax with a consumption tax d. None of the above are correct. 4. In the United States, if the price of imported oil rises so that the price of gasoline and heating oil rise the a. GDP deflator rises much more than does the consumer price index. b. consumer price index rises much more than does the GDP deflator. c. GDP deflator and the consumer price index rise by the same amount. 5. When the quality of a good improves the purchasing power of the dollar a. increases, so the CPI overstates the change in the cost of living if the quality change is not accounted for. b. increases, so the CPI understates the change in the cost of living if the quality change is not accounted for. c. decreases, so the CPI overstates the change in the cost of living if the quality change is not accounted for. d. decreases, so the CPI understates the change in the cost of living if the quality change is not accounted for.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
ID: A 2 6. Which of the following is (directly) counted in U.S. GDP? a. cars produced in Texas and purchased by the U.S. government b. the purchase of peaches (grown in Texas) by a College Station bakery to make peach pies (which are later sold to the public) c. goods and services produced by U.S. citizens working in foreign countries d. Purchases of stock issued by an American company e. More than one of the above is counted in U.S. GDP 7. The country of Hykania does not trade with any other country. Its GDP is $20 billion. Its government purchases $3 billion worth of goods and services each year, collects $3 billion in taxes, and provides $2 billion in transfer payments to households. Private saving in Hyrkania is $4 billion. What is investment in Hyrkania? a.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 04/02/2008 for the course ECON 203 taught by Professor Nelson during the Spring '08 term at Texas A&M.

Page1 / 10

ECON 203 test2 - ID: A Econ 203 Exam 2 (Spring 2007)...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online