Midterm+1+_ECN+1B+SS+1+2011__KEY_

Midterm+1+_ECN+1B+SS+1+2011__KEY_ - Midterm Examination 1,...

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Page 1 of 8 Midterm Examination 1, ECN 1B, SS1 2011, B. Modjtahedi There are 30 multiple choice questions in the exam Question 1. The dollar value of all the goods produced by the Chrysler Corporation in a year might well exceed the dollar value of all the goods produced by a small country such as Jordan or Nepal. Still, the analysis of Chrysler Corporation falls in the realm of microeconomics while we should use macroeconomic tools to study the economies of Jordan or Nepal. Why? A. Because small countries do not have well-developed macroeconomic markets. B. Because small countries are heavily dependent on imports. C. Because Chrysler is just one decision-making unit. D. Because a small country can be treated as just one decision-making unit. E. None of the above. Question 2. What are the three major macroeconomic issues? A. Growth and cycles, inflation, high interest rates. B. Growth and cycles, unemployment, unstable stock prices. C. Economic growth, inflation, unemployment. D. Inflation, stock prices, recessions. E. None of the above. Question 3. Which of the following is classified as an intermediate good by the national income accountants? A. Lumber purchased by a homebuilder. B. Car seats purchased by Ford Corporation and installed in new cars. C. Leather purchased by a shoe manufacturer. D. All of the above. E. None of the above. Question 4 The value of which of the following will NOT be included in the 2007 GDP? A. You bought stock of the GM Corporation issued in 2007. B. I bought a DELL laptop built in 2007. C. Jim had a haircut in June 2007. D. You had your car fixed in August 2007. E. None of the above.
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Page 2 of 8 Year Price of Good 1 Quantity of Good 1 Price of Good 2 Quantity of Good 2 2006 $2 5 $4 10 2007 $4 10 $8 5 Question 5 The table above shows the prices and quantities of two goods produced in a country in 2006 and 2007. These are the only goods produced in the country. What is the real GDP in 2007 (base year = 2006). A. $40 B. $80 C. $100 D. $200 E. None of the above Question 6 The table above shows the prices and quantities of two goods produced in a country in 2006 and 2007. These are the only goods produced in the country. What is the GDP deflator in 2007 (base year = 2006). A. $40 B. $80 C. $100 D. $200 E. None of the above Question 7 Which of the following is the correct definition of GDP? A. The market value of all the goods and services produced in a country during a certain period or time. B. The market value of all the goods and services sold in a country during a certain
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Midterm+1+_ECN+1B+SS+1+2011__KEY_ - Midterm Examination 1,...

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