ECON102Sample Final ExamSpring2010 without Answers

ECON102Sample Final ExamSpring2010 without Answers - ECON...

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ECON 102 Spring, 2010 SAMPLE FINAL EXAM 1. Which of the following happens automatically if the economy starts to fall into a recession? A. In crease in government purchases of goods and services B. Decrease in income tax collections C. Decrease in income tax rates D. Decrease in transfer payments E. Increase in the budget surplus 2. If the federal budget is in deficit even if the economy is at full employment, the deficit is said to be A. a structural deficit B. a cyclical deficit C. a persistent deficit D. a discretionary deficit E. a non-cyclical deficit 3. Which of the following is the least likely to influence consumption expenditure? A. disposable income B. real wealth C. government spending on goods and services D. expectations of price changes E. interest rates 4. The marginal propensity to consume (mpc) is A. consumption divided by the level of disposable income. B. the extra consumption spending prompted by an increase in disposable income divided by the change in disposable income. C. the extra consumption caused by an increase in household wealth, divided by the increase in wealth. D. always greater than one. E. generally smaller than the marginal propensity to save. 5. The fraction of any increase in disposable income that is saved is called A. the marginal propensity to save. B. induced saving. C. the average propensity to save. D. the savings multiplier. E. none of the above 6. Which of the following would shift the aggregate consumption function DOWNWARD? A. an increase in current disposable income B. an increase in expected future income C. an increase in the purchasing power of net assets D. a decrease in the purchasing power of net assets E. none of the above
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7. If planned aggregate expenditure exceeds real GDP then A. there will be unintended disinvestment and firms will increase production. B. there will be unintended investment and firms will decrease production. C. planned investment will automatically increase. D. planned investment will automatically decrease. E. none of the above because planned expenditure cannot exceed real GDP. 8. In a closed economy with no income taxes and fixed prices, if the marginal propensity to consume is 0.8, the value of the autonomous expenditure multiplier would be A. 0.2 B. 0.8 C. 1.25 D. 5 E. none of the above 9. In a closed economy with no income taxes and fixed prices, if the marginal propensity to
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ECON102Sample Final ExamSpring2010 without Answers - ECON...

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