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Midterm

ECON 1010 Study Guide - Midterm Guide: Production Function, Potential Output, Loanable FundsExam


Department
Economics
Course Code
ECON 1010
Professor
All
Study Guide
Midterm

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YORK UNIVERSITY
FACULTY OF LIBERAL ARTS AND PROFESSIONAL STUDIESDEPARTMENT OF ECONOMICS
AP/ECON 1010.03 SECTION T
Introduction to Macroeconomics
TEST #1 VERSION C
!
INSTRUCTOR: Tuesday, February 2nd, 2016
Gordana Colby 1 HOUR (4:00PM – 5:00PM)
LOCATION: ACE 102
NAME: _________________________________ _________________________________
LAST NAME FIRST NAME
STUDENT NUMBER: _______________________________________
SIGNATURE: _______________________________________
INSTRUCTIONS:
Make sure to print your NAME, STUDENT NUMBER and SIGN the sheet above. Write your
name and student number at the top left of each page.
Please fill in your answer to each question on the question paper in the space provided and
on the scantron sheet.
You must use a pencil to fill in the scantron sheets.
NO CALCULATORS are allowed.
You have 1 hour to answer all questions. All questions are multiple choice format.
For multiple choice answers, no work needs to be shown. The full marks will be granted if the
best answer is circled and zero otherwise.
Good luck!

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ECON1010 T - TEST 1
Name___________________________________
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
1)
During the last 10 years, which of the following had the lowest level of real GDP per person?
A)
China
B)
Eastern Europe
C)
Japan
D)
Central and South America
E)
Africa
1)
2)
According to the Ricardo-Barro effect,
A)
households increase personal saving when governments run budget deficits.
B)
taxpayers fail to foresee that government deficits imply higher future taxes.
C)
government deficits raise the real interest rate.
D)
a government deficit decreases the supply of loanable funds.
E)
government budget deficits increase households' expected future disposable income.
2)
3)
In any year, real GDP
A)
must always be less than potential GDP.
B)
might be greater than, less than, or equal to potential GDP.
C)
always equals potential GDP.
D)
increases if potential GDP increases, and decreases if potential GDP decreases.
E)
will always be greater than potential GDP because of the tendency of nations to incur
inflation.
3)
4)
The cost of the CPI basket in base -period prices is $200 and the cost of the CPI basket in
current-period prices is $450. The CPI in the current year is
A)
B)
C)
D)
E)
4)
5)
In a country with a working-age population of 30 million, 18 million are employed, 2 million are
unemployed, and 2 million of the employed are working part-time, half of whom wish to work
full-time. If 1 million of those unemployed are cyclically unemployed, what is the natural
unemployment rate?
A)
5 percent
B)
5.6 percent
C)
11.1 percent
D)
6.7 percent
E)
1 percent
5)
C - 1

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Use
the
table
below
to
answer
the
following
questions.
Table 20.2.6
There are only two goods in this economy.
Price Quantity
Base Year
(dollars)
Current Year
(dollars) Base Year Current Year
Loaves of Bread 1.00 2.10 70,000 75,000
Computer Disks 1.00 1.80 25,000 18,000
6)
Refer to Table 20.2.6. Consider the data in this table. What is current real GDP in terms of
base -year prices?
A)
$95,000
B)
$189,900
C)
$192,000
D)
$93,000
E)
75,000 loaves of bread and 25,000 computer disks
6)
7)
Suppose the country of Tiny Town experiences frictional unemployment. This frictional
unemployment would
A)
signal the number of discouraged searchers is growing.
B)
be considered a natural occurrence in a growing economy.
C)
increase structural unemployment.
D)
signal that the country is in a recession.
E)
decrease the output gap.
7)
8)
Which of the following is not correct?
A)
Gross investment is the amount by which the value of capital increases.
B)
Gross investment is the total amount spent buying new capital and replacing depreciated
capital.
C)
Net investment equals gross investment minus depreciation.
D)
Investment is the purchase of new plant, equipment, and buildings and the additions to
inventories.
E)
Depreciation decreases the value of a firm's capital.
8)
C - 2
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