2020 -- midterm 2 - Name Date ECO 2020(902 11656 State...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Name: _____________________________________________________ Date: ______________________ ECO 2020 (902) 11656 MIDTERM 2 Wayne State University Instructor: Jinghua Huang Fall 2011 PART 1 Multiple Choice: Identify the letter of the choice that best completes the statement or answers the question. 1. The long-run upward trend in real GDP is called A) the business cycle. B) inflation. C) recession. D) economic growth. E) economic fluctuations. 2. The recession phase A) is no longer a phase of the business cycle. B) has the same duration and depth in all business cycles. C) varies in duration and depth with each business cycle. D) has the same depth in all business cycles. E) has the same duration in all business cycles. 3. A recession that is very severe is called a A) monumental shift. B) microeconomic collapse. C) depression. D) deflation. 4. As a rule of thumb, a recession is A) a fall in real GDP lasting at least one month. B) a fall in real GDP lasting at least six months. C) said to occur whenever real GDP falls below the long-term trend. D) said to occur whenever real GDP falls below the long-term trend for at least one month. E) a fall in real GDP lasting at least one year. 5. Which of the following statements is true ? A) Real GDP fluctuates around potential GDP. B) Potential GDP fluctuates around real GDP. C) Real GDP is something like an average of GDP. D) The growth rate of potential GDP is well known and generally agreed upon. E) Real GDP cannot be any greater than potential GDP. 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6. Total spending in the economy is divided into A) consumption, investment, government purchases, and exports. B) consumption, investment, government expenditures, and exports. C) market spending, nongovernmental organization spending, foreign spending, and government spending. D) consumption, investment, government expenditures, and net exports. E) consumption, investment, government purchases, and net exports. 7. In a simple economy, Wanda's Weavers grows cotton and weaves it into cloth. In the current year, Wanda's Weavers produces cloth valued at $1,000, half of which it sells directly to consumers for their own personal use and half of which it sells to Joe's T-shirts. Joe's T-shirts produces T-shirts valued at $1,500 for the current year. What is the value of GDP in this simple economy? A) $2,500 B) $1,500 C) $500 D) $1,000 E) $2,000 8. Net exports are A) the sum of exports and imports. B) the difference between exports and imports. C) exports net of services. D) imports less exports. E) exports earmarked for nongovernmental use. 9. Investment is A) the purchase of final goods by business firms. B) the purchase of securities by business firms. C) the purchase of intermediate goods by business firms. D)
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 03/11/2012 for the course ECO 2020 taught by Professor Huang during the Winter '12 term at Wayne State University.

Page1 / 11

2020 -- midterm 2 - Name Date ECO 2020(902 11656 State...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online