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252%20Exam%20I%20PINK

# 252%20Exam%20I%20PINK - The table below contains data for...

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The table below contains data for the country of Batterland, which produces only waffles and pancakes. The base year is 2006 . Year Price of Waffles Quantity of Waffles Price of Pancakes Quantity 0f Pancakes 2005 \$2 100 \$1 100 2006 \$2 120 \$2 150 2007 \$3 150 \$3 200 2008 \$4 180 \$3 220 1. Batterland’s Real GDP in 2008 equals: a. \$660 b. \$800 c. \$1120 d. \$1380 2. Batterland’s GDP in 2007 equals: a. \$500 b. \$750 c. \$900 d. \$1050 3. Batterland’s inflation rate from 2007 to 2008 was a. 15%. b. 22.5%. c. 33.3%. d. 72.5%. 4. In the closed economy model of Chapter 8, a decrease in the government’s budget deficit will cause: a. the supply of loanable funds to decrease. c. the demand for loanable funds to increase. b. the supply of loanable funds to increase. d. the demand for loanable funds to decrease. 5. A decrease in the government budget deficit will, ceteris paribus, cause the interest rate to ______ and investment to ______ in a closed economy. a. increase; increase c. decrease; increase b. increase; decrease d. decrease; decrease 6. Which of the statements below is a positive statement? a. Increasing tariffs on imports will decrease per-capita income in the United States. b. We should increase taxes on poor families because they are the biggest consumers of government provided goods and services. c. Access to health care ought to be considered a right, not a privilege available only to households with enough income to afford it. d. If we want to stimulate the economy we should increase government spending rather than cut taxes. 7. When computing the opportunity cost of attending a concert you should include a. the price you pay for the ticket and the value of your time. b. the price you pay for the ticket, but not the value of your time. c. the value of your time, but not the price you pay for the ticket. d. neither the price of the ticket nor the value of your time. 8. In the short run, when the rate of inflation slows from 10 to 5 percent we should expect to see: a. an increase in the level of government spending. b. an increase in nominal and real interest rates. c. a decrease in the average price of goods and services. d. an increase in the level of unemployment. ECONOMICS 252 Page 1 of 5 EXAM I - PINK

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9. Analysts at Smith-Barney discovered a negative correlation between the length of women’s skirts and changes in the Dow-Jones Industrial Average over most of the 20 th century. I.e., on average, during periods when women’s skirts were of above average length, stock prices rose at a below average rate. From this study we can conclude that:
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252%20Exam%20I%20PINK - The table below contains data for...

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