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Econ 211 Final Exam Questions & answers
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ECON 211 FINAL asu, ASU Econ 211 FinalExam, ECN 211 : Final Exam Review, ECN
211 Final (Exams 1, 2, 3) ASU Douglas
The Opportunity Cost of an item is - ANS-What you give up to get that item
Total Output in an economy increases when each person specializes because -
ANS-Each person spends more time producing that product in which he or she has a
comparative advantage
The producer that requires a smaller quantity of inputs to produce a certain amount of a
good, relative to the quantities of inputs required by other producers to produce the
same amount of that good - ANS-Has an absolute advantage in the production of that
good
The quantity demanded of a good is the amount that buyers are - ANS-Willing and able
to purchase
The market demand curve - ANS-Represents the sum of the quantities demanded by all
the buyers at each price of the good.
The quantity supplied of a good is - ANS-The amount sellers are willing and able to
produce
What causes equilibrium price to fall - ANS-Demand increase and Supply decrease
Demand and supply both decrease
Demand decrease and Supply increase
Demand and supply both increase
Demand decrease and supply increase
GDP is defined by - ANS-Value of all final goods and services produced within a country
in a given period of time
Changes in nominal GDP reflect - ANS-Both changes in price and the amount being
produced
,The unemployment rate is computed as the number of unemployed - ANS-Divided by
the labor force all times 100
Some persons are counted as out of the labor force because they have made no
serious attempt to find work. However some of these individuals may want to work even
though they are too discouraged to make a serious effort to look. If these individuals
were counted as unemployed instead of out of the labor force, then - ANS-Both
unemployment rate and the labor- force participation rate would be higher
The CPI is used to - ANS-Monitor changes in the cost of living over time
Which of the following statements about real and nominal interest rates is correct -
ANS-When the inflation rate is positive, the nominal interest rate is necessarily greater
than the real interest rate
Sue was an accountant in 1944 and earned 12,000 That year
Her son Josh earns 210,000 in 2013
The Price index in 1944 was 17.6 and 218.4 in 2013
Sue's income amounts to what percentage of josh's - ANS-70.9
During a certain year, the CPI increased from 120 to 132 and the purchasing power of a
bank account increased by 4% For that year - ANS-Nominal interest rate was 14 %
Productivity is defined as the quantity of - ANS-Goods and services produced from each
unit of labor output
All else equal, If there are diminishing returns, then which of the following is true if a
country increases its capital by one unit - ANS-Output will rise but by less than it did
when the previous unit was added
A Bond buyer is - ANS-Saver. Long term bonds have more risk than short term bonds
The source of the supply of loanable funds - ANS-Is saving and the source of demand
for loanable funds is investment
Economist equate money with - ANS-Assets people use regularly to buy goods and
services
Dollar bills, Paintings and emerald necklaces are - ANS-Stores of value
,An Open market purchase - ANS-Increase the number of dollars in the hands of the
public and decreases the number of bonds in the hands of the public
The Fed Reserve - ANS-Is responsible for conduction the nations monetary policy and it
plays a role in regulating banks
The classical dichotomy refers to the idea that the supply of money - ANS-Determines
nominal variables, But not real variables
According to the quantity theory of money, a 3% increase in the money supply -
ANS-Causes the price level to rise by 3%
The modelof aggregate demand and aggregate supply explains the relationship
between - ANS-Real GDP and Price level
If the price level falls, the real value of a dollar - ANS-Rises. SO people will want to buy
more
The long-run aggregate supply curve shifts right if - ANS-The capital stock increases
The sticky wage theory of the short run aggregate supply curve says that the quantity of
output firms supply will increase - ANS-The price level is higher than expected making
production more profitable
An economic expansion is caused by a shift in aggregate demand causes prices to -
ANS-Rise in the short run and rise even more in the long run
Which of the following would cause prices and real GDP to rise in the short run -
ANS-Aggregate demand shifts right
In the short run an increase in the costs of production makes - ANS-Output fall and
prices rise
Which of the following shifts aggregate demand to the left - ANS-Stock prices fall for
some reason other than a change in the price level
Monetary policy is determined by - ANS-The federal reserve and involves changing
money supply
, Fiscal policy is determined by - ANS-The president and congress and involves changing
gov spending and taxation
People choose to hold a larger quantity of money if - ANS-The interest rate falls,which
causes the opportunity cost of holding money to fall
Which of the following events would shift money demand to the right - ANS-an increase
in the price level
When the Fed decreases the money supply we expect - ANS-interest rates to rise and
stock prices to fall
An increase in gov purchases will - ANS-Shift aggregate demand to the right
Suppose the MPS is 0.9
In the gov increases its spending by 30 billion
How much does the aggregated demand shift to the right?
If taxes decrease by 30 billion
How far does aggregate demand shift to the right? - ANS-300 Billion and 270 billion
What does a production possibilities frontier display? - ANS-Possible combinations of
output an economy can produce given available factors of production and technology.
What is a normative statement? - ANS-Policymakers should increase the minimum
wage to improve standard of living.
The opportunity cost of helping a friend move is... - ANS-the next best use of the time
and energy spent helping your friend.
An entity has a comparative advantage if it can produce what? - ANS-At a lower
opportunity cost than another entity.
T/F: Suppose the United States has an absolute advantage in the production of oil and
wheat. This means that the U.S. would not gain from trading these goods. - ANS-FALSE
The United States has a comparative advantage in the production of wheat and an
absolute advantage in the production of both apples and wheat relative to Canada. If
the U.S. and Canada specialize and trade, the U.S. should produce what? - ANS-Wheat
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