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Final

ECON 20B Study Guide - Final Guide: Scantron Corporation, Bank Reserves, Fisher EquationExam


Department
Economics
Course Code
ECON 20B
Professor
All
Study Guide
Final

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Econ 20B: Basic Economics II Name:
Spring 2015: Jenkins ID #:
Final Exam: Version A
Instructions: Choose the best answer for each question. Mark your answers on this exam and on your
scantron sheet. You may not use any outside materials: calculators, smartphones, scratch paper, etc. There
are 58 questions on this exam.
1. Which of the following transactions would not be included in the GDP of the United States?
(a) Google purchases a new facility to house some of its servers.
(b) Your sister purchases a used textbook at the campus bookstore.
(c) Your brother purchases a new house.
(d) The US government purchases five new fighter jets.
2. A bed manufacturer in the US uses $2,000 of materials imported from Canada to produce each bed.
The rest of the materials used for producing the beds are made entirely in the US. The manufacturer
sells each bed to a retailer for $8,000. The retailer sells each bed to a consumer for $10,000. How much
does each bed sale contribute to US GDP?
(a) $18,000.
(b) $8,000.
(c) $20,000.
(d) $10,000.
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Use the following information to answer the next 3 questions. The following data were
observed for the country of Gondor in 2012:
GDP: $500 billion
Investment: $50 billion
Government purchases: $100 billion
Exports: $25 billion
Imports: $50 billion.
3. In 2012, what was the value of net exports for Gondor?
(a) $25 billion.
(b) $25 billion.
(c) $75 billion.
(d) $-50 billion.
4. In 2012, what was the consumption of Gondor?
(a) $400 billion.
(b) $325 billion.
(c) $375 billion.
(d) $300 billion.
5. What was the saving rate for Gondor in 2012?
(a) 1/10 or 0.1.
(b) 1/20 or 0.05.
(c) 1/5 or 0.2.
(d) 1/4 or 0.25.
6. The Irvine Company constructs a new apartment complex in Irvine. To which component of GDP
would this transaction contribute?
(a) Government purchases.
(b) Investment.
(c) Net Exports.
(d) Consumption.
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7. Your friend’s company sells $10 million of U.S.-produced steel to a Brazilian company so that a new
factory can be built in Brazil. To which component of U.S. GDP would this transaction contribute?
(a) Government purchases.
(b) Net Exports.
(c) Investment.
(d) Consumption.
8. A restaurant in the US imports $5,000 of Belgian beer into the U.S. and sells the beer together with
hamburgers and fries. The inputs used to produce the hamburgers and fries were produced entirely
within the US. The revenue received by the restaurant from the sale of burgers, fries, and beer is
$45,000. As a result of these transactions:
(a) Belgian GDP is unchanged and U.S. GDP rises by $50,000.
(b) Belgian GDP rises by $5,000 and U.S. GDP rises by $45,000.
(c) Belgian GDP is unchanged and U.S. GDP rises by $45,000.
(d) Belgian GDP rises by $5,000 and U.S. GDP rises by $40,000.
9. If the real GDP of a country increases from $200 billion to $210 billion, what has been the growth rate
of real GDP?
(a) 2%.
(b) 4%.
(c) 5%.
(d) 6%.
10. The CPI is a statistic that:
(a) measures how the average price of all goods has changed relative to a base year.
(b) takes into account how changes in average consumer income affect the quantity of goods that
people buy each month.
(c) measures how the average price of consumer goods has changed relative to a base year.
(d) measures how the average price of all goods has changed relative to the previous year.
11. Which of the following is not a reason for why the CPI might tend to overstate the cost of living in a
country?
(a) Unmeasured changes in quality.
(b) The catch-up effect.
(c) Substitution bias.
(d) Introduction of new goods.
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