midterm 1 ak

midterm 1 ak - Sonoma State University Department of...

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1 Sonoma State University Department of Economics ECN 304 Florence Bouvet Fall 2009 Midterm 1 –answer key Name (Please Print): Scores: Part I: ________/50 Part II: ________/50 Total: ________/100 Please Note: 1. Succinct responses are strongly encouraged. Any erroneous or too much irrelevant information will count against you. Therefore, you will not receive full credit if you provide a complete correct answer but also include erroneous or too much irrelevant information. No credit will be given to answers that do not address the question. 2. Show all your work. Make sure you show all equations used in each calculation. Answers without supporting calculations will receive very little credit. 3. For most questions, you are given a lot more space than you really need . When time is called, please stop work immediately.
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2 Part I: Multiple Choice Questions (50 points, 2 points each) 1. In 2008, the GDP of the United States totaled about: A) $14 billion. B) $140 billion. C) $14 trillion . D) $140 trillion. 2. The marginal product of capital is: A) output divided by capital input. B) additional output produced when one additional unit of capital is added. C) additional output produced when one additional unit of capital and one additional unit of labor are added. D) value of additional output when one dollar's worth of additional capital is added. 3. A typical trend during a recession is that: A) the unemployment rate falls. B) the popularity of the incumbent president rises. C) incomes fall. D) the inflation rate rises. 4. The amount of capital in an economy is a ______ and the amount of investment is a ______. A) flow; stock B) stock; flow C) final good; intermediate good D) intermediate good; final good 5. The panel of economists appointed by the Senate Finance Committee estimates that the CPI ______ inflation by approximately ______ percentage point(s) per year. A) overestimates; 1 B) overestimates; 10 C) underestimates; 1 D) underestimates; 10 6. The inflation rate is a measure of how fast: A) the total income of the economy is growing. B) unemployment in the economy is increasing. C) prices in the economy are rising. D) the number of jobs in the economy is expanding. 7. The supply of loanable funds is equivalent to: A) national saving. B) private saving. C) public saving. D) investment.
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3 8. When a firm sells a product out of inventory, investment expenditures ______ and consumption expenditures ______. A) increase; decrease B) decrease; increase C) decrease; remain unchanged D) remain unchanged; increase 9. Deflation occurs when: A) real GDP decreases. B) the unemployment rate decreases. C) prices fall. D) prices increase, but at a slower rate. 10.
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This note was uploaded on 03/08/2011 for the course ECON 304 taught by Professor Eyler during the Spring '07 term at Sonoma.

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midterm 1 ak - Sonoma State University Department of...

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