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ECO 212 Final Exam




Question;ECO 212 Final Exam;1) Which of the following issues is an;application of using macroeconomics to make a real world decision?;A. Whether a company should;increase its worker benefits;B. Whether this year's;enrollment will increase for University of Phoenix.;C. Whether the growth rate of;the Chinese economy will exceed 10% in 2010;D. Whether workers should;choose to remain in a factory;2) The forces that make market economies work;are;A. work and leisure;B. demand and supply;C. regulation and restraint;D. taxes and government;spending;3) A market is a;A. group of buyers and;sellers of a particular good or service;B. group of people with;common economic characteristics;C. place where buyers and;sellers come together to engage in trade;D. place where an auctioneer;helps set prices and arrange sales;4) If a decrease in income increases the;demand for a good, then the good is;A. a substitute good;B. a complement good;C. a normal good;D. an inferior good;5) Two goods are substitutes if a decrease in;the price of one good;A. decreases the demand for;the other good;B. decreases the quantity;demanded of the other good;C. increases the demand for;the other good;D. increases the quantity;demanded of the other good;6) A likely example of substitute goods for;most people would be;A. peanut butter and jelly;B. tennis balls and tennis;rackets;C. televisions and;subscriptions to cable television services;D. pencils and pens;7) Another term for equilibrium price is;A. dynamic price;B. market-clearing price;C. quantity-defining price;D. satisfactory price;8) If, at the current price, there is a;shortage of a good;A. sellers are producing more;than buyers wish to buy;B. the market must be in;equilibrium;C. the price is below the equilibrium;price;D. quantity demanded equals;quantity supplied;9) If there is suddenly an increase in;population in North Carolina, then the average wage for North Carolina will;A. decrease because the;supply of labor increases;B. increase because the;supply of labor increases;C. decrease because the;demand of labor increases;D. increase because the;demand of labor increases;10) The marginal product of labor is equal to;the;A. incremental cost;associated with a one unit increase in labor;B. incremental profit;associated with a one unit increase in labor;C. increase in labor;necessary to generate a one unit increase in output;D. increase in output;obtained from a one unit increase in labor;11) When we focus on the firm as a supplier;of a good or a service, we assume that the firm is a profit maximizer. When we;focus on the firm as a demander of labor, we assume that the firm's objective;is to;A. minimize wages;B. minimize variable costs;C. maximize the number of;workers hired;D. maximize profit;12) What are the two types of imperfectly;competitive markets?;A. Monopoly and monopolistic;competition;B. Monopoly and oligopoly;C. Monopolistic competition;and oligopoly;D. Monopolistic competition;and cartels;13) Monopolistically competitive firms are;typically characterized by;A. many firms selling;products that are similar, but not identical;B. many firms selling;identical products;C. a few firms selling;products that are similar, but not identical;D. a few firms selling highly;different products;14) The commercial jetliner industry;consisting of Boeing and Airbus, would best be described as a (an);A. perfectly competitive;market;B. monopolistically;competitive market;C. oligopoly;D. monopoly;15) Imperfectly competitive firms are;characterized by;A. horizontal demand curves;B. standardized products;C. a large number of small;firms;D. price making ability;16) Gross domestic product serves as a;measure of two things;A. the total spending of;everyone in the economy and the total saving of everyone in the economy;B. the total income of;everyone in the economy and the total expenditure on the nation's output of;goods and services;C. the value of the nation's;output of goods and services for domestic citizens and the value of the;nation's output of goods and services for the rest of the world;D. the nation's saving and;the nation's investment;17) Which of the following newspaper;headlines would be more closely related to what microeconomists study than to;what macroeconomists study?;A. Unemployment rate rises;from 5 percent to 5.5 percent.;B. Real GDP grows by 3.1;percent in the third quarter.;C. Retail sales at stores;show large gains.;D. The price of oranges rises;after an early frost;18) A fiscal policy can be;A. an increase of federal;government spending financed by the treasury;B. a sale of bonds in an open;market operation by the treasury;C. a rise of reserve ratios;by the Fed;D. that the Fed prints money;19) Stagflation exists when prices;A. and output rise;B. rise and output falls;C. fall and output rises;D. and output fall;20) An expansionary fiscal policy will;A. reduce unemployment and;increase GDP;B. reduce unemployment and;decrease GDP;C. increase unemployment and;increase GDP;D. increase unemployment and;decrease GDP;21) If money is used as a mechanism to hold;purchasing power for a period of time, it is functioning as a;A. medium of exchange;B. store of value;C. unit of account;D. standard of value;22) Inflation can be measured by the;A. change in the consumer;price index;B. percentage change in the;consumer price index;C. percentage change in the;price of a specific commodity;D. change in the price of a;specific commodity;23) Given the following information about AAA;bank;Bank Deposits $100,000;Loans $50,000;Required Reserves $20,000;Excess Reserves $30,000;What is the reserve ratio set by the Federal;Reserve Bank?;A. 10 percent;B. 20 percent;C. 30 percent;D. 50 percent;24) Sally sells 40 bags of lettuce for a;total of $80 at the farmers? market.;A. The $80 is a real;variable. The quantity of lettuce is a nominal variable.;B. The $80 is a nominal;variable. The quantity of lettuce is a real variable.;C. Both the $80 and the;quantity of lettuce are nominal variables.;D. Both the $80 and the;quantity of lettuce are real variables.;25) Monetary neutrality implies that an;increase in the quantity of money will;A. increase employment;B. increase the price level;C. increase the incentive to;save;D. not increase any of the;above;26) For any country, if the world price of;computers is higher than the domestic price of computers without trade, that;country should;A. export computers, since;that country has a comparative advantage in computers;B. import computers, since;that country has a comparative advantage in computers;C. neither export nor import;computers, since that country cannot gain from trade;D. neither export nor import;computers, since that country already produces computers at a low cost compared;to other countries;27) Outflow represents the quantity of;dollars;A. supplied for the purpose;of selling assets domestically;B. supplied for the purpose;of buying assets abroad;C. demanded for the purpose;of buying U.S. net exports of goods and services;D. demanded for the purpose;of importing foreign goods and services;28) In the open economy macroeconomic model;net capital outflow is equal to the quantity of;A. dollars supplied in the;foreign exchange market;B. dollars demand in the;foreign exchange market;C. funds supplied in the;loanable funds market;D. funds demanded in the;loanable funds market;29) A tariff on a product;A. enhances the economic;well-being of the domestic economy;B. increases the domestic;quantity supplied;C. increases the domestic;quantity demanded;D. results in an increase in;producer surplus that is greater than the resulting decrease in consumer;surplus;30) Aquilonia has decided to end its policy;of not trading with the rest of the world. When it ends its trade restrictions;it discovers that it is importing incense, exporting steel, and neither;importing nor exporting rugs. Which groups in Aquilonia are better off as a;result of the new free-trade policy?;A. Producers of incense and;consumers of steel;B. Consumers of all three;goods;C. Consumers of incense and;producers of rugs;D. Producers of steel and consumers of;incense


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