ECO 1102 Final: Practice Exam #1.pdf

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ECO 1102 Full Course Notes

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Coverage: mankiw chapters 5, 6, 7, 8 and 9. Which of the following statistics is the best single measure of an economy"s well-being: the inflation rate, gdp, the trade deficit. If gdp rises, income and expenditure must both rise. income and expenditure must both fall. income must rise, but expenditure may rise or fall: expenditure must rise, but income may rise or fall. Page 1 period of time: none of the above are correct. Roommates grace and kelly are sharing household chores and think they have an even exchange. The cpi is a measure of the overall cost of: goods and services bought by a typical consumer, goods and services produced in the economy, stocks on the new york stock exchange. Use the table below to answer the following questions. 2006: 100, 160, 200, there is insufficient information to answer this question.

Related Questions

If an economy's GDP falls, then it must be the case that the economy's

A. Income and saving fall

B. Income and market value of all products both fall.

C. Income falls and the market value of all production rises.

d.Income rises and the market value of all production falls.

2. Gross Domestic product measures

a. Income and expenditure.

B. Income

c. Expenditure.

d. Neither.

3. If all quantities produced in the united states rise by 13.4% and all prices fall by 13.4% which of the following occurs?

Does Real GDP rise or fall? Does the nominal GDP rise or fall?

4. Which of the following does not add to US GDP?

a. The federal gov. Sends a social security check to your grandmother.

b. CIty of new york pays a salary to policemen.

c. Air France buys a plane from Boeing, the US aircraft manufacturer.

5. IS the best single measure of a society's economic well-being the unemployment rate or the GDP?

6. Keynesian economics was developed by John Keynes in response to:

A. The great recession.

b. The great depression.

C. Out of control gov. spending.

17. For an economy as a whole,

a. Wages must equal profit.

b. consumption must equal income.

c. Income must equal expenditure.

d. Consumption must equal saving.

8. As in the case f Ireland, Keynesian economics does not tend to work in countries that:

a. Are large and self-sustaining.

b. Are small and insulated.

c. Are medium-sized with good governments.

d. Are smaller and are open to free (ish) trade.

e. Are large and have free trade.

Thanks! Please be as detailed as you can.!

coralmoose18

1. The multiplier helps explain

A. why a decrease in taxes causes real Gross Domestic Product (GDP) to fall by more than the amount of the decrease in taxes.

B. why a fall in investment cause real Gross Domestic Product (GDP) to rise by more than the amount of the decrease in investment.

C. why a rise in government expenditures causes real Gross Domestic Product (GDP) to rise by more than the amount of the increase in government spending.

D. why an increase in disposable income causes real Gross Domestic Product (GDP) to rise by less than the amount of the increase in disposable income.

2. If the marginal propensity to save (MPS) increases, the multiplier

A. decreases.

B. can either increase or decrease, depending on what happens to the marginal propensity to consume (MPC).

C. stays the same.

D. increases.

QUESTION 60

The investment function will shift when there is a change in

		A. the opportunity cost of retained earnings.
		B. firms' profit expectations.
		C. the cost of borrowing.
		D. the interest rate.

1.43 points

QUESTION 61

In the Keynesian model, whenever planned saving exceeds planned investment,

		A. there will be unplanned inventory accumulation.
		B. real GDP will not be influenced.
		C. the interest rate will remain unchanged.
		D. there will be unplanned inventory depletion.

1.43 points

QUESTION 62

In the Keynesian model, whenever planned saving is less than planned investment,

		A. there will be unplanned inventory depletion.
		B. the interest rate will remain unchanged.
		C. there will be unplanned inventory accumulation.
		D. real GDP will not be influenced.

1.43 points

QUESTION 63

Government purchases

		A. are determined by the political process.
		B. are determined by the public.
		C. are influenced by interest rates.
		D. are determined by suppliers.

1.43 points

QUESTION 64

If, at some level of output, total planned real expenditures are less than real Gross Domestic Product (GDP),

		A. real GDP will either fall or remain unchanged, depending on the MPC.
		B. real GDP will rise.
		C. real GDP remains unchanged.
		D. unplanned inventories will increase and real GDP will fall.

1.43 points

QUESTION 65

When the economy is operating at the equilibrium level of GDP, we know that

		A. total planned real expenditures equal real GDP.
		B. real net exports equal inventory changes.
		C. planned real investment spending equals real net exports of zero.
		D. total planned real consumption expenditures equal real GDP.

1.43 points

QUESTION 66

One divided by the marginal propensity to save (MPS) is the formula for

		A. the inverse of the multiplier.
		B. the multiplier.
		C. one minus the multiplier.
		D. autonomous consumption.

QUESTION 67

Thinking like an economist would, which is true of investment?

		A. Investment represents spending on capital goods.
		B. Investment is a stock concept.
		C. Investment is putting money into stocks and bonds.
		D. It is the portion of disposable income that is not used for consumption or saving.

QUESTION 68

Other things being equal, if input prices rise in a country, then there would be

		A. cost-push inflation.
		B. demand-pull inflation.
		C. cost-pull deflation.
		D. more production and a lower price level.

QUESTION 69

In the short run, if the price level rises, then the overall economy can temporarily produce beyond its nominal capacity. One reason for this is that

		A. existing capital equipment can be used more intensively.
		B. wage rates rise almost simultaneously with the price level.
		C. the unemployment rate usually rises dramatically along with the price level.
		D. workers can be switched from counted to uncounted production.

fuchsiaclam197

A recent report on GDP growth rates showed that the GDP of Dorada, a developed economy, has declined by 1.5 percent this year. Emily George and her friend Tabitha Jude, both students of economics, are discussing the possible reasons for the decline in the growth rate. Emily feels that the government deficit has reached an unsustainable level, as a result of which interest rates now are extremely high. This has reduced government expenditure in recent times, leading to a decline in GDP. Tabitha however disagrees. According to her, the fall in GDP must imply a fall in consumer spending as household consumption accounts for the largest share in Dorada's GDP. Which of the following, if true, will strengthen Emily's claim that the high fiscal deficit is affecting the government's ability to spend?

A. The central government's grants-in-aid to the local governments increased by 7 percent.

B. A sizeable portion of the tax revenue generated in Dorada is being used to make interest payments on sovereign debt.

C. The President's economic advisory council is of the opinion that the fiscal deficit should not exceed 3 percent of the country's GDP.

D. Given that the government of Dorada has never defaulted on sovereign debt, it enjoys very high credit ratings.

E. The government of Dorada scaled up its defense expenditure by more than 50 percent in the last two years.

magentacoyote534

ECO 1102 Final: Practice Exam #1.pdf

ECO 1102 Full Course Notes

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