final-sol - Economics 304L FINAL EXAM Helen Schneider Fall...

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Economics 304L FINAL EXAM Helen Schneider Fall 2008 SOLUTIONS
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I. Multiple choice . Do the following 50 multiple choice questions. Read each questions carefully and circle the best answer. There is only one answer to each question. It often helps to jot down a quick graph or do some work next to the question before searching for the answer. 1. A production possibilities curve that is a straight line results from: a. always exchanging at constant costs. b. always exchanging at increasing costs. c. always exchanging at decreasing costs. d. scarcity. 2. For a given production possibilities frontier, which points are attainable? a. points inside the frontier b. points outside the frontier c. points on or outside the frontier d. points on the frontier only e. points on or inside the frontier 3. Faster economic growth imposes an opportunity cost in the form of a. reduced current consumption. b. a larger capital stock. c. increased investment. d. increased future income. 4. In periods of generally rising prices, a. real GDP will grow faster than nominal GDP. b. nominal GDP will grow slower than real GDP. c. real GDP will grow slower than nominal GDP. d. real GDP and nominal GDP will grow at the same rate. 5. Which of the following items is NOT included in gross private domestic investment? a. residential housing b. new equipment purchased by businesses c. purchases of common stock d. increase in business inventories 6. Which of the following statements regarding the types of unemployment is true? a. Frictional unemployment is generally short-term, whereas structural unemployment is often long-term. b. Cyclical unemployment is due to expansions in the business cycle. c. Frictional unemployment is brought about by changes in technology. d. Structural unemployment is the result of normal labor turnover. 7. The unemployment rate is equal to the: a. labor force divided by the number of unemployed. b. number of unemployed divided by the population of the United States. c. number of unemployed divided by the working age population. d. number of unemployed divided by the labor force. 2
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8. The CPI measures the a. average change in prices paid by urban consumers for a typical market basket of consumer goods and services. b. average change in prices of goods and services that compose the GDP. c. average change in prices paid by urban consumers for food, gas, and housing. d. marginal change in prices paid by urban consumers for a typical market basket of consumer goods and services. 9. Which of the following groups would most likely be harmed by unanticipated inflation? a. workers b. borrowers c. lenders d. producers 10. If disposable income falls by $100 billion, and consumption falls by $90 billion, the slope of the consumption function is a. -0.45. b.
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This note was uploaded on 02/16/2010 for the course ECONOMICS 420K taught by Professor Dusansky during the Spring '10 term at University of Texas at Austin.

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final-sol - Economics 304L FINAL EXAM Helen Schneider Fall...

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