ECON 104: FINAL EXAM
100 Cards in this Set
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Which of the following is not one of the questions that all economists must answer?
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c. What price to produce at
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Opportunity Costs are
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d. All of the above
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Factors of production
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d. all of the above
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Institutions are collective understanding that influence individual actions
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a. True
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Almost all modern economies are referred to as Mixed Market economies because
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a. they combine aspects of capitalism, socialism, and traditional economic systems
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the economic concept of comparative advantage tells us that
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a, that everybody has something to offer the market
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Which of the following people are in the labor force
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d. a and b
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A division of labor refers to
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b. different people doing different jobs
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If we wanted to find data about local labor markets a good place to find this information would be
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a. the bureau of labor statistics (bls)
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If I wanted to find detailed data on a specific industry a good source for this information would be
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a. the bureau of economic analysis (bea)
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A hypothesis is the same thing as a theory
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b. false
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Economic Analysis cannot be done if there is no formal data
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b. false
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Gross domestic product (GDP) is a measure of
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a. economic aggregate expenditures or income
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Which of the following would not be included in United States GDP
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d. none of the above
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If we could perfectly measure all economic activity then
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c. GDP incomes would equal GDP expenditures
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When economists talk about consumption spending this means
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b spending done by households
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When economists talk about investment they are referring to
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a. spending by business on plant and equipment
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If the economy only has a household sector and a business sector then for the household sector to have sustainable savings the business sector must
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b. consistently run deficits
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Demand pull and costs push inflation can happen at the same time
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true
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Everybody is employed, there is a general shortage of products at the stores due to excess demand we should expect
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c. Demand pull inflation
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The PPI is
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d. all of the above
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If you are given the following CPI numbers 2001 = 100, 2002 = 103.5, 2003 = 104.5, 2004 = 105. Then the annual rate of inflation in 2003 (using the CPI) was
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c. .96%
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The CPI perfectly reflects the spending and price patterns of all households
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b. False
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I just resigned from my job to look for another full time. I am
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b. Frictionally unemployed
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I lost my job because a robot now does the work. I am
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c. Structurally unemployed
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Which of the following is an example of a market?
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d. all the above
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the circular flow diagram captures
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a. economic flows
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households provide ______ to the factor market
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c. Factors of production
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Household expenditures equals household incomes minus
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b. savings and taxes
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Over time total expenditures must equal
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a. total incomes
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In our model of business investment we hypothesized that
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d. all of the above
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If total autonomous spending is 10,000 and the multiplier is 3 then equilibrium incomes are
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c. 30,000
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In the above question we referred autonomous spending this
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c. both of the above
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Data about the characteristics of US households is best found at
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a. the Census
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When households defer spending that amount becomes an economic
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b. Leakage
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Factors of production, in competitive markets, earn
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d. all of the above
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the term labor share refers to
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b. the share of profits that go to labor
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Which of the following use NAICS style classification for definitions
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d. all the above
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Which of the following is a common method of financing business investment
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d all the above
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If we have an economy made up of only households and businesses (no financial sector, government or foreign sector) then household savings must equal ____ for the economy to be in equilibrium
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c. business debt
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If we find that the total amount injected into an economic system is $20,000 and the total amount leaked from that system is $6,000 then the derived multiplier will be
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b. 3
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In the equation C=c0 + c1 (Y-t) The value of c1 tells us
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d. All the above
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If we can assume that saving is the only leakage from an economic system and we know the MPC is .5 then we also know that the multiplier effect will be
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b. 2
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Which of the following would decrease the value of your answer above
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a. an increase in taxes
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Over the last 40 years most increases in household income, and thus economic growth, has gone to households
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d. Mostly to the upper classes
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The tastes and preferences of households
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d. all the above
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When one says the labor contract is at will it means
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c. that the contract can be terminated be either party at any time
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The NAICS is a system of
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b. industrial classification
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A _______ represents the ownership of a firm a _______ represents a debt obligation of the firm
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c. stock, bond
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Business investment is
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d. all the above
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Which of the following is NOT considered to be one of the functions of the FED
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d. none of the above
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the final asset that backs the US dollar is
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b, the willingness and ability of the us gov to pay its debts and collect taxes
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Which of the following two economic problems are the basis of the FED's dual mandate
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c. inflation and unemployment
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If required reserves are 10% and the FED sells 1 million dollars of government securities (bonds) then,
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a. the supply of money will fall
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Which of the following is not one of the conventional tools of the FED
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d. none of the above
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The current chairperson of the FED is
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b. Janet Yellen
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When banks make loans they are effectively
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b. creating credit
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The right amount of money is the amount that
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b. maintains full employment and price stability
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When the FED buys bonds from the banking system it
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b. increases banking liquidity
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Which of the following is NOT a function of money
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d. none of the above
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the Federal funds rate is
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b. the interest rate paid on reserve loans issued between banks
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what is the present value of $10,000 payable as a lump sum one year form now
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a. $9523
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During the recent financial crisis the FED began purchasing
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b. mortgage backed securities
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If the required reserve ratio is 10% and a bank has $100,000 in deposits and $20,000 in its vault which of the following is true
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d. all of the above
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The ________ is set by the FED
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d, all the above
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In a conventional open market operation the FED is
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a. adjusting the amount of liquidity in the banking system
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When a loan is repaid it has the effect of
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c. destroying credit
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The FED sets the Federal Funds Rate
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b. false
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The FED conducts open market operations by
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a. purchasing and selling non liquid assets to the banking system
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open market operations are conducted in a manner so as
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b. to ensure the FED hits its FED funds rate target
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The glass steagall act
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d. all of the above
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The US dollar is an example of commodity money
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b. false
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For a conventional bank demand deposits are
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a. a liability
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The discount window refers to the ability of the banks
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a. borrow reserves from the FED
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Relative to the last 40 years interest rates today are relatively
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a. low
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The government by setting the rules determines the limits within economic activity must occur
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a. true
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when the federal government spends money it
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a. spends it into existance
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The federal government requires a fund of tax revenues in order to spend
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b. false
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When the government taxes its citizen it also
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c. lowers consumption spending
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Which of the following would be entered a s a negative (-) on the current account
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c. the domestic purchase of a Honda car made in Japan
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The financial account (international trade) is a measure of
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b. the international transfer of assets
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When we say that a nation has a trade deficit it means
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d. all of the above
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Which of the following would be an advantage of a flexible exchange rate
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c. ability to conduct domestic monetary policy
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Which of the following would be an advantage of a fixed exchange rate
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a. price stability in the foreign sector
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one way tax policy changes GDP is through
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a. changes in household consumption spending
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A fundamental problem with public sector spending is
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a. it involves compromise
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If we expect a foreign currency to appreciate relative to our own
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a. It will increase the overall return of that nation's assets in terms of our currency
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It would be difficult for a nation to reduce its trade deficit significantly if
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a. there is strong demand for that nations assets
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If a canadian citizen purchases a house in the US the value of that house would be entered on
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b. the financial account
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In modern economies the State
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a. sets both the rules and is a consumer of goods and service
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Debt and Deficit are the same concept
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b. false
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today the rate of interest paid by the US government on its debt is about
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a. 2-3%
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A common form for US government debt is
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c. Treasury bonds
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Which of the following would be an example of an automatic stabilizer
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d. all of the above
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A current account deficit implies
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a. a financial account surplus
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Solutions for frictional unemployment will also solve structural unemployment
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b. false
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Recession occur because
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a. of a lack of spending
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Generally speaking, real GDP has _________ over the last 60 years
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a, increased
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The largest single trading partner of the United States is
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b. Canada
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The relevant cost of public sector activity is
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c. the opportunity cost
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ECON 104: FINAL CHAPTER 13