Figure 17 2 19 refer to figure 17 2 suppose the

Figure 17-2
19) Refer to Figure 17-2. Suppose the economy is at point B in the figure above. Which of the
following is true?
19)
______
A) The natural rate of unemployment is 3.8%.
B) The economy is producing at potential GDP.
C) Expected inflation and actual inflation are the same.
D) The current unemployment rate is 5%.
E) The expected rate of inflation is 3%.
20) Refer to Figure 17-2. Suppose the economy is at point C in the figure above. If workers adjust
their expectations of inflation, which of the following will be true?
20)
______
A .
21) If the number of unemployed workers is 19 million, the number in the working-age population
is 500 million, and the unemployment rate is 4%, how many workers are in the labor force?
21)
______
22) If a person withdraws $500 from his/her checking account and holds it as currency, then M1 will
________ and M2 will ________.
22)
______

ECON104 Final Exam TIERNEY © 2014
8
Figure 15-10
23) Refer to Figure 15-10. In the figure above, suppose the economy is initially at point A . The
movement of the economy to point B as shown in the graph illustrates the effect of which of the
following policy actions by the Federal Reserve?
23)
______
A) an increase in income taxes
B) an open market sale of Treasury bills
C) a decrease in the required reserve ratio
D) an open market purchase of Treasury bills
24) A decrease in the demand for eggs due to changes in consumer tastes, accompanied by a
decrease in the supply of eggs as a result of an outbreak of Avian flu, will result in
24)
______

ECON104 Final Exam TIERNEY © 2014
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Figure 11-1
25) Refer to Figure 11-1. Within a country, the impact of wars and revolutions and their subsequent
destruction of capital is reflected in the per-worker production function in the figure above by a
movement from
25)
______
C to A .