1)What are the two questions that need to be answered by an economic system?
(1)Who owns the factors of production and (2) the method used to
motivate, coordinate, and direct economic activity. Economic systems have two
polar extremes: the command system
1)What is a Fractional Reserve System?
Monetary policy at the basis of the modern banking system. Under FRS,
banks are required to hold only a fraction (typically 12 percent) of the
depositors' funds as cash reserves. The remaining 88 percent of deposited
1)The demand for money in an economy is based on two
factors. Name them.
To make purchases with it and to hold it as an asset.
2)An increase in nominal GDP and interest rates will cause
money demand to increase or decrease?
Demand for money decreases.
Unemployment occurs when a person who is actively searching for
employment is unable to find work. Unemployment is often used as a measure of the
health of the economy. There are four types of unemployment, which are known, as
Econ 300- Third Graded Problem Set
Spring 2004-Eric Jacobson
Due: Tuesday, May 18
Instructions: Please answer all of the following questions. Responses should be typed
or written very neatly in pencil. Take the time to draw neat and carefully labeled (col
Practice Exam II & Study Guide
Dennis C. Plott
University of Illinois at Chicago
Department of Economics
ECON 300 Econometrics
Practice Exam II & Study Guide
Name (print neatly and clearly):
ECON 300: HOMEWORK 1
This class requires that the student is proficient in solving a system of linear equations, computes the
area of basic geometric figures in two dimensions, calculates percentages, and is familiar with the la
ECON 300 Homework 6 Answer Key
Due Monday, December 6
Chapter 9 problems: 4, 7, 8, 9, 19, 27
Profit is the difference between total revenue and total cost, but producer surplus is the difference between
total revenue and variable cost.
Owners of exi
First Midterm Exam
version W Answers
This exam consists of 25 multiple choice questions. The maximum duration of the exam is 50
1. In the spaces provided on the scantron, write your last name, then your first name, and also b
Step 1 Analyze gasoline price hike statistics the scenario below.
In June 2008, the U.S. retail gas price jumped from $3 to $4 a gallon.
This is a 33% increase in price from January 2008.
During that time, the total quantity of gasoline purchased fell by
1)Money serves three vital functions, which are?
-Medium of exchange
-Unit of account
-Store of Value
2)Define liquid and use it to distinguish M1 from M2.
An assets ease with which it can be converted quickly into the most widely
accepted and easily spen
1) How does a built-in stabilizer work?
Automatic or built-in stabilizers are government programs and
policies that cushion the impact of a change in spending in the economy.
Technically automatic stabilizers reduce the multiplier effect of an
1)What is Quantity demanded?
The total amount of goods or services that are demanded at any
given point in time. The quantity demanded depends on the price of a good
or service in the marketplace, regardless of whether that market is in
equilibrium. The q
1)What is an externality?
A cost or benefit from production or consumption, accruing without
compensation to someone other than the buyers and sellers of the product .
2)How does demand market failure and supply market failure happen?
A market failure occ
1)List the five fundamental questions about governments role in the economy (dont be
shy- try to rephrase them in your own words to demonstrate understanding).
- Can governments sustain long term economic growth vice only short
- Can they reduce shor
1)Name the three reasons why government tracks economic data.
- Assess the health of the economy by comparing levels of
production at regular intervals.
- Track the long run course of the economy to see whether it has
grown, been constant, or declined.
1)Three economies A, B & C grow at the rates of 2, 7 and 10% respectively. In
how many years will they double their outputs?
A= 35 years
B= 10 years
C= 7 years
2)The Industrial Revolution began when? Where? By who? How?
It began in 1776 in Scotland when i
1) Is a recession 6 or more consecutive months of decline OR without growth?
In a 1975 New York Times article, economic statistician Julius
Shiskin suggested several rules of thumb for defining a recession, one of
which was "two down consecutive quarters
1)The 45 reference line represents?
The 45 degree line on a graph relating consumption and income
shows where all points of the consumer spending is equal to their
disposable income. This gives the point of reference at which below this 45
degree line rep
1) What are the components of aggregate expenditures?
Consumption, planned investment, government purchases, and net
2) If the economy is beyond equilibrium GDP, which is greater, output or expenditure?
What happens to inventories? Which is great
1) What is exactly measured on the horizontal axis and why must it be in real
In a graph, this is one of two lines that intersect at a right angle at their
origins. This is the "X-axis" that runs from right and left. In most analyses,
[City, ST ZIP Code]
[City, ST ZIP Code]
Dear [Recipient Name]:
It is with a heavy heart that I submit my resignation. The last 15 years at [Company Name] have been