# ECON 2002.01 Study Guide - Midterm Guide: Scantron Corporation, Production Function, Ceteris Paribus

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Midterm 2 AU17 Econ 2002.01

Version 2 Name _________________

Instructions:

1. Write your name on the exam.

2. Write “1” under “IDENTIFICATION NUMBER” on the scantron and fill out the bubble “1”.

3. Write your name on the scantron, last name first and first name next. Write the recitation number

under the “SPECIAL CODES” on the scantron. You should fill out the bubbles for both name and the

special code.

4. After you answer all the questions, put the exam and the scantron on the table in the front of the room

and leave the room quietly, no talking and no questions. You cannot keep the exam.

Recitation Number

BLDG

Room

Start

End

Days

TA Name

15166

Ramseyer

115

3:00 PM

3:55 PM

F

Lee, Hyung Koo

15168

Journalism

239

4:10 PM

5:05 PM

F

Lee, Hyung Koo

15174

Arps Hall

12

11:30 AM

12:25 PM

M

Lee, Hyung Koo

15167

Ramseyer

9

4:10 PM

5:05 PM

F

Hua,Junyi

15172

Scott Lab

N054

10:20 AM

11:15 AM

M

Hua,Junyi

15175

Ramseyer

115

4:10 PM

5:05 PM

M

Hua,Junyi

15163

McPherson

2019

1:50 PM

2:45 PM

M

Chakraborty,Pubali

15165

Smith Lab

1048

3:00 PM

3:55 PM

F

Chakraborty,Pubali

24260

Denney

238

8:00 AM

8:55 AM

M

Chakraborty,Pubali

15169

Watts Hall

395

1:50 PM

2:45 PM

M

Okahata,Nobuhide

15171

McPherson

2019

8:00 AM

8:55 AM

M

Okahata,Nobuhide

15173

Macquigg

160

4:10 PM

5:05 PM

M

Okahata,Nobuhide

15164

Scott Lab

N054

1:50 PM

2:45 PM

M

Xu,Shuo

15170

McPherson

1046

5:20 PM

6:15 PM

M

Xu,Shuo

24235

Jennings

60

8:00 AM

8:55 AM

M

Xu,Shuo

1. The percent increase in the CPI from one year to the next is a measure of the

A) GDP deflator.

B) unemployment rate.

C) real interest rate.

D) inflation rate.

Answer: D

Year

CPI

1996

157

1997

161

1998

163

2. Consider the above values of the consumer price index for 1996, 1997, and 1998: The inflation rate

from 1996 to 1997 was equal to

A) 1.2 percent.

B) 2.0 percent.

C) 2.5 percent.

D) 4.0 percent.

Answer: C

Product

Quantity

(2011)

Price (2011)

Expenditure

(2011)

Price

(2016)

Expenditure

(on base year

quantities)

(2016)

Computers

1

$1,200

$1,200

$900

$900

Books

10

25

250

30

300

Burgers

50

3

150

4

200

Total

$1,600

$1,400

3. Suppose an economy has only three goods and the typical family purchases the amounts given in the

table above. If 2011 is the base year, then what is the CPI for 2016?

A) 14.3

B) 87.5

C) 114.3

D) 160

Answer: B

Year

Nominal Average

Hourly Earnings

CPI 1984 = 100

1965

$2.65

32

2010

22.59

219

The table above reports the nominal average hourly earnings in private industry and the consumer

price index for 1965 and 2010.

4. The real average hourly earnings for 1965 in 1984 dollars equal

A) $3.87.

B) $5.80.

C) $12.10.

D) $8.28

Answer: D

5. An easy approximation for the real rate of interest is

A) the nominal interest rate plus the inflation rate.

B) the nominal interest rate minus the inflation rate.

C) the interest rate determined by the supply and demand in the money market.

D) the nominal interest rate.

Answer: B

6. If the growth rate of real GDP rises from 3% to 4% per year, then the number of years required to

double real GDP will decrease from

A) 24.0 years to 18.0 years.

B) 28.0 years to 21.0 years.

C) 11.2 years to 10.8 years.

D) 23.3 years to 20.6 years.

Answer: A

7. When production in an economy grows more quickly than the population in that economy, which of

the following must be occurring?

A) Real GDP is falling.

B) Incomes are growing at a slower rate than the population.

C) Real GDP per capita is rising.

D) Living standards are falling.

Answer: C

Consider the following data for a closed economy:

Y = $12 trillion

C = $8 trillion

I= $2 trillion

G = $2 trillion

TR = $2 trillion

T = $3 trillion

8. Based on the information above, what is the level of public saving?

A) $0

B) $1 trillion

C) $2 trillion

D) negative $1 trillion (a deficit of $1 trillion)

## Document Summary

Instructions: write your name on the exam, write 1 under identification number on the scantron and fill out the bubble 1 , write your name on the scantron, last name first and first name next. Write the recitation number under the special codes on the scantron. Jennings: the percent increase in the cpi from one year to the next is a measure of the, gdp deflator, unemployment rate, real interest rate, inflation rate. 1998: consider the above values of the consumer price index for 1996, 1997, and 1998: the inflation rate from 1996 to 1997 was equal to, 1. 2 percent, 2. 0 percent, 2. 5 percent, 4. 0 percent. Total: suppose an economy has only three goods and the typical family purchases the amounts given in the table above. If 2011 is the base year, then what is the cpi for 2016: 14. 3, 87. 5, 114. 3, 160.