Practice questions Set 2 - 2009

Practice questions Set 2 - 2009 - RSM 100 Introduction to...

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RSM 100 – Introduction to Commerce September, 2009 Practice Questions - Set No. 2 – on lectures from September 23 and 30. The following are examples of questions asked on previous tests. Choose the best answer – there is no penalty for guessing. Answers will be posted in 1-2 weeks. 1. Which of the following is the best explanation for why inventories typically rise before or at the beginning of a recession: a. Managers of firms want to have enough goods on hand to weather the downturn. b. Consumers stock up on goods when they see the downturn coming. c. Managers are not sure if a downturn is coming and sell off inventories so as not to be caught with too much. d. Managers are not sure if a downturn is coming and build up inventories instead of laying off workers e. b and c 2. When the U.S. Federal Reserve causes interest rates to rise, which of the following is most likely to occur: a. demand for housing goes up and employment increases b. demand for automobiles does down and employment decreases c. exports go up and employment decreases d. government spending goes down and employment decreases e. business investment goes down and employment increases 3. Which of the following is NOT one of the major expenditure components of GDP a. changes in inventories b. consumption expenditure c. business investment d. exports e. none of the above; all are components of GDP. 4. When the U.S. or Canadian governments cut taxes, in the short run this: a. reduces the money supply and raises GDP b.
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Practice questions Set 2 - 2009 - RSM 100 Introduction to...

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