ECON304 - MidTerm01_Practice - F10

ECON304 - MidTerm01_Practice - F10 - I' "\...

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Unformatted text preview: I' "\ Sonoma State University Department of Economics ECN 304 Florence Bouvet Practice Midterm 1 Multiple Choice: Choose the best answer. I) The consumer price index a) Measures the average price of all goods and services produced in the economy . . b) ignores imported goods. c) tends to understate the level of inflation because of substitution bias. e~ None of the above. r> . \, 2) All of the following actions are classified as investment in macroeconomics. except: ) You buy shares of stock in Intel (a company) b) Intel builds a new factory in Sacramento. c) Cafe Roma buys a new espresso machine. d) Your uncle buys a new home. 3) According to the neoclassical model of the factors market. a rise in supply of labor will __ the real rental rate on capital and __ the real wage: a) raise. raise 11) raise, lower c) lower, raise d) lower, lower 4) In the long run, the level of national income in an economy is determined by its: ~ factors of production and production function. b) real and nominal interest rate. c) government budget surplus or deficit. d) rate of econqmi; and accounting profit. 5) Which of the following is not a stock variable? a) the government debt b) the labor force. c) the amount of money held by the public. I{!) inventory investment. For questions 6-7, assume the following information for an economy that produces two goods. Use 2002 as your base year. 2002 2003 Beach towels Price $5 $6 Quantity 3 2 Suntan lotion Price $3 $4 Quantity 8 10 6) The GDP deflator for 2003 is: a) 40/52. b) 40/50. c) 50/39 G\)V~?C;)~ :. ~~)52/40. 7) The CPI for 2003 is: a) 40/52. b) 40/50. 0) 50/39 d) 52/40.------ ~?(j.s -_ ~\'0 .... \ ~ S ~~~::~L~--- t~ \ \ 2-K~G, :: ~\L. \0 I<-~~ ~~_ ~-sz \ S l....
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ECON304 - MidTerm01_Practice - F10 - I' "\...

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