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Unformatted text preview: Exam Name___________________________________ MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) Gross domestic product is the total ________ produced within a country 1) _______ in a given time period. A) market value of all final and intermediate goods and services B) market value of all final goods and services C) amount of final and intermediate goods and services D) market value of all goods and services 2) In the figure above, which movement reflects an increase in demand? A) from point a to point e B) from point a to point b C) from point a to point d D) from point a to point c 3) A normal good is a good for which A) there are very few complements. B) there are few substitutes. C) demand increases when income increases. D) demand decreases when income increases. 2) _______ 3) _______ 4) In the above figure, if the demand curve is D2, then A) the equilibrium price will be P1 and the equilibrium quantity will be Q1. B) there will be a shortage equal to Q2 - Q1. C) the equilibrium price will be P1 and the equilibrium quantity will be Q2. D) an increase in price will shift the demand curve to D3. 5) If a market is NOT in equilibrium, then which of the following is likely to occur? A) The price will adjust to bring the market to equilibrium. B) The supply curve will shift to bring the market to equilibrium. C) The demand curve will shift to bring the market to equilibrium. D) Both A and B are correct. 4) _______ 5) _______ 6) The above figures show the market for oranges. Which figure shows the effect of changing consumer preferences for more orange juice and less coffee in the morning? A) Figure A B) Figure B C) Figure C D) Figure D 7) The above figures show the market for oranges. Which figure(s) shows the effect of a nation-wide consumer boycott of eating oranges? A) Figure C B) Figures B and C C) Figure B D) Figures A and D 8) Recessions occur A) when growth in real GDP decreases for two consecutive quarters. B) when the unemployment rate exceeds 6 percent. C) whenever unemployment increases. D) when growth in real GDP is negative for two consecutive quarters. 9) Monetary policy A) is controlled by the Federal Reserve. B) can be used to smooth the business cycle. C) is used to keep inflation in check. D) all of the above 10) National saving is defined as A) personal saving by households and businesses plus government saving. B) the total amount of household saving. C) the saving by the federal government. D) None of the above answers are correct. 6) _______ 7) _______ 8) _______ 9) _______ 10) ______ 11) If national saving (S) is $100,000, net taxes (T) equal $100,000 and government purchases of goods and services (G) are $25,000, how much are households and businesses saving? A) $25,000. B) -$25,000. C) $225,000. D) none of the above 12) Which of the following is a stock variable? A) wealth B) investment C) income D) saving 13) Which of the following correctly describes GDP? I. GDP is a flow variable. II. GDP is the value of the production of an individual firmʹs goods and services. III. GDP can be calculated using the expenditure approach or the income approach. A) I and III B) III only C) II and III D) I only 14) Let C represent consumption expenditure, S saving, I gross private domestic investment, G government expenditure on goods and services, and NX net exports of goods and services. Then GDP equals A) C + I + G + NX. B) C + S + G - NX. C) C + I + G - NX. D) C + S + G + NX. Item Million s of dollars 11) ______ 12) ______ 13) ______ 14) ______ Personal consumption 80 expenditure Government purchases of goods 30 and services Net taxes 35 Gross private domestic investment 20 Imports of goods and services 10 Exports of goods and services 20 15) Using the information in the table above, calculate the value of GDP. 15) ______ A) $195 million B) $185 million C) $145 million D) $140 million 16) A recession 16) ______ A) follows a trough. B) comes just before a peak. C) is a period during which real GDP expands. D) is defined as a period of negative real GDP growth. 17) The unemployment rate 17) ______ A) rises during expansions and falls during recessions. B) never reaches 0 percent but rises during recessions and expansions. C) falls to 0 percent during expansions and goes up during recessions. D) never reaches 0 percent but rises during recessions and falls during expansions. 18) Inflation is defined as a continuing increase in A) the wages of all workers. B) money GDP. C) the price level. D) the prices of specific products. 19) When the federal government spends less than it collects in tax revenue, it A) has a government budget surplus. B) has a government budget deficit. C) must enact monetary policy. D) must enact fiscal policy. 20) When we export goods to foreign countries, we A) increase our inflation rate. B) make payments to the rest of the world. C) decrease our inflation rate. D) receive payments from the rest of the world. 21) When the demand for a good decreases, its equilibrium price ________ and equilibrium quantity ________. A) falls; decreases B) falls; increases C) rises; increases D) rises; decreases 18) ______ 19) ______ 20) ______ 21) ______ 22) The above figure shows the market for hamburger. Which figure shows the effect of an announcement by the U.S. Food and Drug Ad istratio min n (FDA)tha 22) t eating hamburg er causes early death? A) Figure A B) Figure B C) Figure C D) Figure D 23) Which of the following shifts the supply curve rightward? A) an increase in the population B) a decrease in the price of the resources used to produce the good C) a decrease in the price of the good D) a positive change in preferences for the good 24) Which of the following influences peopleʹs buying plans and does not shift the demand curve? A) the prices of related goods B) the price of the good C) preferences D) income Real Nomin GDP al GDP (billion GDP Year (billion s of deflator s of 2000 dollars) dollars) 2004 5,200 4,800 2005 5,500 112 2006 5,750 5,000 25) The above table gives the real and nominal GDP of a hypothetical nation. What is the GDP deflator for 2004? A) 111.5 B) 105.2 C) 108.3 D) 109.6 ___ ___ 23) ______ 24) ______ 25) ______ 1) B 2) C 3) C 4) C 5) A 6) A 7) C 8) D 9) D 10) A 11) A 12) A 13) A 14) A 15) D 16) D 17) D 18) C 19) A 20) D 21) A 22) B 23) B 24) B 25) C ...
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This note was uploaded on 04/12/2011 for the course ECON 1101 taught by Professor Rappoport during the Fall '08 term at Temple.

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