F2010Final MC VersionA - first initial of last name: ECO...

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first initial of last name: ECO 320L Fall 2010 Professor Beatrix Paal Final Exam Multiple Choice name: 12/8/2010 60 questions, 1.5 points each = 90 points total "The core values of The University of Texas at Austin are learning, discovery, freedom, leadership, individual opportunity, and responsibility. Each member of the University is expected to uphold these values through integrity, honesty, trust, fairness, and respect towards peers and community." Version A Page 1
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1. Classical economists argue that A) the government should actively intervene in the economy to eliminate business cycles. B) the government should have an active role in the economy. C) wages and prices don't adjust quickly, so the economy is slow to return to equilibrium. D) government policies are often ineffective or counterproductive. 2. Which of the following is not a topic of macroeconomics? A) What causes inflation and what can be done about it. B) What factors contribute to the presence of monopolies in the economy. C) Why unemployment periodically reaches very high levels. D) Why nations have different rates of growth. 3. _____ is a stock, _____ is a flow. A) GDP; investment B) GDP, the size of the labor force C) The value of foreign financial assets held by a country; the size of the labor force D) The value of foreign financial assets held by a country; investment 4. The principal distinction between positive and normative statements is that A) economists always agree on positive statements but almost always disagree on normative statements. B) positive statements tell us "what should be", while normative statements tell us "what is". C) positive statements can be true or false, normative statements are neither true nor false. D) positive statements are optimistic and normative statements are neutral. 5. Can labor productivity increase while total factor productivity decreases? A) No. Total factor productivity is always proportional to labor productivity. B) Yes. It can happen if the labor force is rising faster than the capital stock. C) No. Total factor productivity is another name for the level of technology, which is the same as labor productivity. D) Yes. It can happen if the capital stock is rising rapidly. 6. Equilibrium in the economy means A) prices are not changing over time B) tax revenues equal government spending, so the government has no budget deficit. C) unemployment is zero. D) quantities demanded and supplied are equal in all markets. Version A Page 2
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7. Mark buys a one-year German government bond (called a bund) for $400. He receives principal and interest totaling $436 one year later. During the year the CPI rose from 150 to 162, but he had thought the CPI would be at 159 by the end of the year. By Marks had expected the real interest rate to be ___________, but it actually turned out to be ___________. A)
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This note was uploaded on 06/09/2011 for the course ECON 320 taught by Professor Azzamonti during the Spring '08 term at University of Texas at Austin.

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F2010Final MC VersionA - first initial of last name: ECO...

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