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Final

ECON 20B Final Exam Spring 2008Exam


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

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Econ 20B Spr 2008
Sample Final Exam
Prof. Min Ouyang
Please Do this sample final exam before looking at the answer key!!!
Time limit: 120 minutes
Instructions:
1) The exam is closed book.
2) Final exam is 40% of the course grade!!!
3) Please use ink pens to write your answers.
4) Use of non-programmable calculator is permitted.
5) Please show your ID and your calculator when turning in
the exam.

Only pages 1-3 are available for preview. Some parts have been intentionally blurred.

Part I – Choice Questions
1. GDP is not a perfect measure of well-being; for example,
a. GDP excludes the value of volunteer work.
b. GDP does not address the distribution of income.
c. GDP does not address environmental quality.
d. All of the above are correct.
2. Suppose that in the economy in general efficiency wages become more common.
Economists would predict that this would
a. increase the quantity demanded and decrease the quantity supplied of labor
thereby decreasing the natural rate of unemployment.
b. decrease the quantity demanded and increase the quantity supplied of labor
thereby increasing the natural rate of unemployment.
c. increase the quantity demanded and decrease the quantity supplied of labor
thereby increasing the natural rate of unemployment.
d. decrease the quantity demanded and increase the quantity supplied of labor
thereby decreasing the natural rate of unemployment.
3. An increase in the price of domestically-produced industrial robots will be reflected
in
a. both the GDP deflator and the consumer price index.
b. neither the GDP deflator nor the consumer price index.
c. the GDP deflator but not in the consumer price index.
d. the consumer price index but not in the GDP deflator.
4. Other things equal, relatively poor countries tend to grow
a. slower than relatively rich countries; this is called the poverty trap.
b. slower than relatively rich countries; this is called the fall-behind effect.
c. faster than relatively rich countries; this is called the catch-up effect.
d. faster than relatively rich countries; this is called the constant-returns-to-scale
effect.

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5. According to classical macroeconomic theory, changes in the money supply affect
a. nominal variables and real variables.
b. nominal variables, but not real variables.
c. real variables, but not nominal variables.
d. neither nominal nor real variables.
6. Other things the same, if workers and firms expected prices to rise by 2 percent but
instead they rise by 3 percent, then
a. employment and production rise.
b. employment rises and production falls.
c. employment falls and production rises.
d. employment and production fall.
7. From 2001 to 2005 there was a dramatic rise in the price of houses. If this made
people feel wealthier, then it would shift
a. aggregate demand right.
b. aggregate demand left.
c. aggregate supply right.
d. aggregate supply left.
8. When taxes increase, consumption
a. decreases as shown by a movement to the left along a given aggregate demand
curve.
b. decreases as shown by shifting aggregate demand to the left.
c. increases as shown by shifting aggregate supply the left.
d. None of the above is correct.
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