practice-exam2 - This is a practice exam. Recall you also...

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This is a practice exam. Recall you also have handouts regarding tax incidence and consumer/producer surplus. These topics will be covered on the exam but are not covered on this practice exam. The gdp handout will also be useful. Your exam will have 40 multiple choice questions. 1. Periods in which output and employment are falling are known as: A) recessions. B) booms. C) expansions. D) deflations. 2. If a country has a working-age population of 200 million, 120 million people with jobs, and 30 million people unemployed and seeking employment, then its unemployment rate is: A) 5%. B) 7.5%. C) 15%. D) 20%. 3. If a country has a working-age population of 200 million, 135 million people with jobs, 10 million people who were looking for a job but have given up, and 5 million people unemployed and seeking employment, then its number of discouraged workers is: A) 25 million. B) 15 million. C) 10 million. D) 5 million. 4. Monetary policy involves: A) changes in government spending. B) changes in government tax receipts. C) changes in the quantity of money. D) changes in tax rates. 5. In calculating the unemployment rate, discouraged workers are: A) included in the employment statistics. B) included in the labor force. C) not included in the labor force. D) treated just like the underemployed. Page 1
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6. Stabilization policy refers to efforts taken to A) reduce unemployment. B) reduce the severity of recessions. C) cause deflation. D) Both a and b are correct. 7. Real wages: A) have not been adjusted for change in prices over time. B) have been adjusted for changes in prices over time. C) are after-tax wages. D) are wages as a ratio of the minimum wage. 8. The trade balance is the difference between the value of the: A) trade deficit and the budget deficit. B) goods and services that one country sells to other countries and the value of the goods and services it buys in return. C) exchange rates of two countries that are engaged in international trade. D) national debt and the foreign debt. 9. A stock in a company is: A) a share of ownership of a company held by a shareholder. B) an IOU that pays interest. C) a portion of a firms profits paid to stock owners. D) part of private savings. 10. Goods that are produced in a particular period but NOT sold in that period: A) go into inventories and are called consumption. B) end up in inventories and are included in investment. C) are finally included in depreciation when they are sold. D) are classified as intermediate goods. 11. Which of the following would be an example of an intermediate good? A) stocks and bonds purchased by a business executive B) a cellular telephone purchased by a college student C) a wedding ring purchased by an engineer for his fiancée D) motor oil purchased by a taxi driver for his cab Page 2
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12. Which of the following is included in GDP? A) the purchase of 100 shares of Microsoft stock
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This note was uploaded on 04/07/2008 for the course ECON 110 taught by Professor Gormely during the Spring '08 term at Kansas State University.

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practice-exam2 - This is a practice exam. Recall you also...

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