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ECON 104: FINAL EXAM
Which of the following is not one of the questions that all economists must answer? |
c. What price to produce at
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Opportunity Costs are |
d. All of the above
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Factors of production |
d. all of the above
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Institutions are collective understanding that influence individual actions |
a. True
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Almost all modern economies are referred to as Mixed Market economies because |
a. they combine aspects of capitalism, socialism, and traditional economic systems
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the economic concept of comparative advantage tells us that |
a, that everybody has something to offer the market
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Which of the following people are in the labor force |
d. a and b
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A division of labor refers to |
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 |
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 |
a. the bureau of economic analysis (bea)
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A hypothesis is the same thing as a theory |
b. false
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Economic Analysis cannot be done if there is no formal data |
b. false
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Gross domestic product (GDP) is a measure of |
a. economic aggregate expenditures or income
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Which of the following would not be included in United States GDP |
d. none of the above
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If we could perfectly measure all economic activity then |
c. GDP incomes would equal GDP expenditures
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When economists talk about consumption spending this means |
b spending done by households
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When economists talk about investment they are referring to |
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 |
b. consistently run deficits
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Demand pull and costs push inflation can happen at the same time |
true |
Everybody is employed, there is a general shortage of products at the stores due to excess demand we should expect |
c. Demand pull inflation
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The PPI is |
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 |
c. .96%
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The CPI perfectly reflects the spending and price patterns of all households |
b. False
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I just resigned from my job to look for another full time. I am |
b. Frictionally unemployed
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I lost my job because a robot now does the work. I am |
c. Structurally unemployed
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Which of the following is an example of a market? |
d. all the above
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the circular flow diagram captures |
a. economic flows
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households provide ______ to the factor market |
c. Factors of production
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Household expenditures equals household incomes minus |
b. savings and taxes
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Over time total expenditures must equal |
a. total incomes
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In our model of business investment we hypothesized that |
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 |
c. 30,000
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In the above question we referred autonomous spending this |
c. both of the above
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Data about the characteristics of US households is best found at |
a. the Census
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When households defer spending that amount becomes an economic |
b. Leakage
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Factors of production, in competitive markets, earn |
d. all of the above
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the term labor share refers to |
b. the share of profits that go to labor
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Which of the following use NAICS style classification for definitions |
d. all the above
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Which of the following is a common method of financing business investment |
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 |
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 |
b. 3
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In the equation C=c0 + c1 (Y-t) The value of c1 tells us |
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 |
b. 2
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Which of the following would decrease the value of your answer above |
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 |
d. Mostly to the upper classes
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The tastes and preferences of households |
d. all the above
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When one says the labor contract is at will it means |
c. that the contract can be terminated be either party at any time
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The NAICS is a system of |
b. industrial classification
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A _______ represents the ownership of a firm a _______ represents a debt obligation of the firm |
c. stock, bond
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Business investment is |
d. all the above
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Which of the following is NOT considered to be one of the functions of the FED |
d. none of the above
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the final asset that backs the US dollar is |
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 |
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, |
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 |
d. none of the above
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The current chairperson of the FED is |
b. Janet Yellen
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When banks make loans they are effectively |
b. creating credit
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The right amount of money is the amount that |
b. maintains full employment and price stability
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When the FED buys bonds from the banking system it |
b. increases banking liquidity
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Which of the following is NOT a function of money |
d. none of the above
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the Federal funds rate is |
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 |
a. $9523
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During the recent financial crisis the FED began purchasing |
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 |
d. all of the above
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The ________ is set by the FED |
d, all the above
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In a conventional open market operation the FED is |
a. adjusting the amount of liquidity in the banking system
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When a loan is repaid it has the effect of |
c. destroying credit
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The FED sets the Federal Funds Rate |
b. false
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The FED conducts open market operations by |
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 |
b. to ensure the FED hits its FED funds rate target
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The glass steagall act |
d. all of the above
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The US dollar is an example of commodity money |
b. false
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For a conventional bank demand deposits are |
a. a liability
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The discount window refers to the ability of the banks |
a. borrow reserves from the FED
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Relative to the last 40 years interest rates today are relatively |
a. low
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The government by setting the rules determines the limits within economic activity must occur |
a. true
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when the federal government spends money it |
a. spends it into existance
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The federal government requires a fund of tax revenues in order to spend |
b. false
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When the government taxes its citizen it also |
c. lowers consumption spending
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Which of the following would be entered a s a negative (-) on the current account |
c. the domestic purchase of a Honda car made in Japan
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The financial account (international trade) is a measure of |
b. the international transfer of assets
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When we say that a nation has a trade deficit it means |
d. all of the above
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Which of the following would be an advantage of a flexible exchange rate |
c. ability to conduct domestic monetary policy
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Which of the following would be an advantage of a fixed exchange rate |
a. price stability in the foreign sector
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one way tax policy changes GDP is through |
a. changes in household consumption spending
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A fundamental problem with public sector spending is |
a. it involves compromise
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If we expect a foreign currency to appreciate relative to our own |
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 |
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 |
b. the financial account
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In modern economies the State |
a. sets both the rules and is a consumer of goods and service
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Debt and Deficit are the same concept |
b. false
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today the rate of interest paid by the US government on its debt is about |
a. 2-3%
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A common form for US government debt is |
c. Treasury bonds
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Which of the following would be an example of an automatic stabilizer |
d. all of the above
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A current account deficit implies |
a. a financial account surplus
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Solutions for frictional unemployment will also solve structural unemployment |
b. false
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Recession occur because |
a. of a lack of spending
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Generally speaking, real GDP has _________ over the last 60 years |
a, increased
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The largest single trading partner of the United States is |
b. Canada
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The relevant cost of public sector activity is |
c. the opportunity cost
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