ECON 2002.01 Study Guide - Final Guide: United States Treasury Security, Aggregate Demand, Scantron Corporation

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Principles of Macroeconomics White Exam Booklet
E2002 Macroeconomics Final Exam
Please bubble in the answer on your scantron. There are 50 questions.
1) Microeconomics is defined as that part of economic analysis that
A) studies the behavior of the economy as a whole.
B) includes the problems of inflation and unemployment.
C) studies individual decision making by households and firms.
D) concerns aggregate production and consumption.
Answer: C
2) In economic terminology, when a resource is used to produce output it is referred to as
A) an intangible.
B) a factor of production.
C) a service.
D) a fifth element.
Answer: B
3) The law of demand includes the statement "other things being equal." These other things
include all of the following EXCEPT
A) the price of that good in the law of demand.
B) consumers' income.
C) consumers' tastes and preferences.
D) the number of potential buyers.
Answer: A
4) If the production possibilities curve is a downward sloping straight line, then
A) resources are highly specialized, making it difficult to use them for alternative uses.
B) technological change has increased.
C) production is efficient only when producing at the mid-point.
D) all resources must be perfectly adaptable for alternative uses.
Answer: D
5) Which of the following is the most liquid?
A) real estate
B) currency.
C) U.S. treasury bonds.
D) shares of stock.
Answer: B
6) A person puts a $100 bill in the glove compartment of his car in case of an emergency. This is
an example of
A) the precautionary demand for money.
B) the transaction demand for money.
C) the emergency investment demand for money.
D) the asset demand for money.
Answer: A
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Principles of Macroeconomics White Exam Booklet
E2002 Macroeconomics Final Exam
7) Refer to the above figure. Which panel is consistent with the Fed selling bonds?
A) Panel A
B) Panel B
C) Panel C
D) Panel D
Answer: A
8) In the above figure, suppose the economy is initially at a short-run equilibrium at point D and
there is an unanticipated increase in the money supply. Which point represents the new short-run
equilibrium?
A) A
B) B
C) C
D) D
Answer: C
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Principles of Macroeconomics White Exam Booklet
E2002 Macroeconomics Final Exam
9) According to A.W. Phillips, an inverse relationship has existed between
A) unemployment and interest rates.
B) the rate of growth of the money supply and the unemployment rate.
C) the inflation rate and unemployment rate.
D) the inflation rate and the money supply.
Answer: C
10) Suppose a nation's rate of growth of per capita real Gross Domestic Product (GDP) is 3
percent and its rate of growth in real GDP is 4 percent. Given this information, the nation's
population growth rate is approximately equal to
A) 1 percent
B) 2 percent
C) 3 percent
D) 7 percent
Answer: A
11) Specialization in trade will be economically efficient if it is based upon
A) national security needs.
B) absolute advantage.
C) comparative advantage.
D) government regulations.
Answer: C
12) In a market system, which component conveys information about what is relatively scarce
and what is relatively abundant?
A) The number of producers
B) The number of consumers
C) Prices
D) The amount of government regulation
Answer: C
13) The net-export effect of expansionary monetary policy is a(n)
A) depreciation of the value of the dollar and the increase of U.S. net exports.
B) depreciation of the value of the dollar and the decrease of U.S. net exports.
C) appreciation of the value of the dollar and the increase of U.S. net exports.
D) appreciation of the value of the dollar and the decrease of U.S. net exports.
Answer: A
14) The natural rate of unemployment is
A) zero.
B) the unemployment rate when there is no structural unemployment.
C) the unemployment rate when there is no structural or cyclical unemployment.
D) the unemployment rate that exists in long-run equilibrium, after adjustments to all
changes have occurred
Answer: D
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Document Summary

Please bubble in the answer on your scantron. There are 50 questions: microeconomics is defined as that part of economic analysis that. Answer: b: the law of demand includes the statement "other things being equal. " These other things include all of the following except. Answer: a: if the production possibilities curve is a downward sloping straight line, then. Answer: b: a person puts a bill in the glove compartment of his car in case of an emergency. Answer: a: the precautionary demand for money, the transaction demand for money, the emergency investment demand for money, the asset demand for money, real estate, currency, u. s. treasury bonds, shares of stock. Answer: a: panel a, panel b, panel c, panel d, in the above figure, suppose the economy is initially at a short-run equilibrium at point d and there is an unanticipated increase in the money supply. Which point represents the new short-run equilibrium: a, b, c, d.

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