Midterm+2+v1-1 - page 1 of 9 VO Midterm ersion 1 N M Exam...

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

View Full Document Right Arrow Icon
Version 1 M N O page 1 of 9 Midterm Exam 2, Econ 102 November 8, 2010 This exam has two parts: a multiple choice section consisting of 20 questions, and a short answer/graphing section, worth 20 points. You will submit all exam materials (scantron, question booklet and completed short answers) and sign yourself out at the end of the exam. 1. All of the following create structural unemployment except a. a government-mandated price floor on the price of labor set above the equilibrium wage b. collective bargaining efforts that secure higher wages for unionized workers relative to non- unionized workers c. offering high wages in order to attract high-quality workers d. granting Social Security benefits to laid-off workers 2. Making unemployment benefits more generous is likely to cause a. an increase in the size of the labor force. b. a reduction in the time spent searching for a job. c. a decrease in the total amount of government transfers. d. an increase in the unemployment rate. 3. Consider the market for loanable funds. In 2001, the market is in equilibrium. Between 2001 and 2003, two major changes take place affecting the market: i. the expected rate of inflation increases by 3% and ii. the government’s deficit increases significantly Which of the following correctly describes the changes in equilibrium in the market for private loanable funds between 2001 and 2003? a. the quantity of loanable funds decreases, the nominal interest rate rises by more than 3% b. the quantity of loanable funds decreases, the nominal interest rate rises by less than 3% c. the quantity of loanable funds increases, the nominal interest rate rises by more than 3% d. the quantity of loanable funds increases, the nominal interest rate rises by less than 3% 4. Holding all else constant, countries with higher export volume, a. have higher domestic investment spending than countries with lower export volume b. have lower domestic investment spending than countries with lower export volume c. have the same investment spending as countries with lower export volume d. have lower imports than counties with lower export volume
Background image of page 1

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

View Full DocumentRight Arrow Icon
page 2 of 9 5. Consider the loanable funds market graphed to the right. Your company is considering investing in a project to develop and produce 1000 Hoverboards. The project has estimated costs of $462,000, and the board of directors insists that any loans taken out must be paid back in 1 year. You recommend to the president of the company that they engage in the project as long as the revenue for the project is at least a. $462,000 b. $491,106 c. $924,000 d. $29,106 6. When an economy is performing below equilibrium output, unintended investment is_________, inventories are ____________, and so firms _____________ production. 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.

Page1 / 10

Midterm+2+v1-1 - page 1 of 9 VO Midterm ersion 1 N M Exam...

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