MIDTERM1 V3 SOLUTION POST.pdf - Midterm 1 Part 1 u2013...

This preview shows page 1 - 3 out of 13 pages.

Midterm 1 Part 1 Multiple Choice 40 questions (80 points) 1. How can we tell the difference between a stock and a flow? Choose the best answer. a. A stock is measured in dollars. A flow is measured in dollars per year. b. A stock is a quantity that is measured over an interval of time. A flow is a quantity that is measured at a point in time. c. A stock is a quantity that is measured at a point in time. A flow is a quantity that is measured over an interval of time. d. Any variable that can be recorded at a point in time is a stock. All other variables are flow variables.
2. Which of the following is a transaction in the US Goods Market?
3. Jane has $2000 in her bank account at the end of July. She earns $2000 in August from her job. She spends $1800 on rent and food. She has no o ther assets or liabilities. Jane’s savings during August are ____ and her wealth at the end of August is ______.
4. Joe’s Coffee Shop has a building and equipment worth 100,000 in Jan. 2014. The existing buildin and equipment depreciate 2% over the year. Joe buys a new expresso machine and other equipment in Dec. 2014 worth $10,000. What is Joe’s net investment during 2014? (note: the expresso machine and new equipment do not depreciate in December) g
5. Which of the following flows does not represent a factor payment? (i) General Motors builds a new factory (ii) General Motors buys new robotic equipment for its manufacturing facility (iii) General Motors pays its workers’ salaries a. (i) b. (i) and (ii) c. (ii) d. (i) and (iii)
6. In the circular-flow diagram,
7. G = government purchases=$10000, TR = transfer payments =$3000, TAX = taxes collected=$12000, INT = interest government pays on its debt=$3000. The government is running a budget ________ of $ _______?
8. Which of the following is true?
2

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture