ECON+21100+Study+Guide+for+Exam+2+Chapters+15-17

ECON+21100+Study+Guide+for+Exam+2+Chapters+15-17 - ECON...

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Page 1 ECON 2100 Study Guide for Exam 2 Chapters 15-17 Exam Date: October 13th Name: __________________________ Date: _____________ 1. Transfer payments: A) are a means by which government raises funds. B) represent a redistribution of funds from one individual to another individual in the economy. C) are counted in GDP. D) is another term for government taxation. 2. A laptop computer purchased by an accounting firm is considered to be: A) consumption spending. B) investment spending. C) private saving. D) a pre-tax dividend. 3. GDP is the sum of: A) personal consumption, investment, government purchases, exports and imports. B) personal consumption, investment, government purchases, and net exports. C) personal consumption, investment, government purchases, and net imports. D) value added, net imports, and government purchases. 4. Inflation is when there is: A) a rising aggregate price level. B) an expansion of output. C) a rise in wages. D) a rise in the unemployment rate. 5. A decrease in inventories is considered: A) a fall in investment spending which will lead to a drop in future sales. B) an increase in investment spending which will lead to an increase in future sales. C) to have no impact on investment since it is not part of investment spending. D) part of government spending.
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Page 2 6. If the price level in the economy and the nominal wages both doubled, then the real wages would: A) also double. B) increase by one half. C) remain unchanged. D) decrease by one half. 7. Nominal GDP is: A) the inflation adjusted GDP. B) the real GDP minus depreciation. C) the current dollar GDP. D) the constant dollar GDP. Use the following to answer question 8: Use this scenario to answer questions 145–148. Scenario: Real GDP Suppose that in Year 1 an economy produces 100 golf balls that sell for $3 each and 75 pizzas that sell for $8 each. The next year the economy produces 110 golf balls that sell for $3.25 each and 80 pizzas that sell for $9 each. 8. (Scenario: Real GDP) The growth rate of nominal GDP from Year 1 to Year 2 is: A) 10%. B) 7.8%. C) 19.7%. D) 8.8%.
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Page 3 Use the following to answer question 9: Figure: Circular Flow Model 9. (Figure: Circular Flow Model) How does the government finance its purchases of goods and services? A) by printing money B) by taxes C) by borrowing D) by taxes and borrowing 10. Assume that the real GDP of the U.S. is approximately $12 trillion and the population of the United States is approximately 300 million. What is per capita real GDP? A) $4,000 B) $36,000 C) $40,000 D) Real per capita GDP can't be determined without more information. 11. Nominal GDP may be used to compare: A) the dollar amount of final goods produced in different years. B) the price of final goods times the number of goods produced in one year.
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ECON+21100+Study+Guide+for+Exam+2+Chapters+15-17 - ECON...

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