Economics 2301 Final UPDATED ACTUAL Exam Questions and CORRECT Answers
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Economics 2301
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Economics 2301
Economics 2301 Final UPDATED
ACTUAL Exam Questions and CORRECT
Answers
If the current level of real GDP lies below potential GDP, then an appropriate fiscal policy
would be to _____, which will shift the _____ curve to the _____. - CORRECT ANSWER-
B. increase government purchases; AD; right...
Economics 2301 Final UPDATED
ACTUAL Exam Questions and CORRECT
Answers
If the current level of real GDP lies below potential GDP, then an appropriate fiscal policy
would be to _____, which will shift the _____ curve to the _____. - CORRECT ANSWER-
✔✔B. increase government purchases; AD; right.
Reference: Ref 13-3
(Figure: Short- and Long-Run Equilibrium II) If the economy is at equilibrium at E1, the
appropriate policy to return the economy to potential output would be a(n): - CORRECT
ANSWER- ✔✔D. decrease in government spending.
Money that has value apart from its use as money is: - CORRECT ANSWER- ✔✔B.
commodity money.
When we use money to buy groceries, money is playing the role of a: - CORRECT
ANSWER- ✔✔D. medium of exchange.
Unemployment that is due to the time workers spend in job search is considered: -
CORRECT ANSWER- ✔✔frictional unemployment.
(Figure: An Increase in Aggregate Demand) The short-run equilibrium at Y2 and P2: -
CORRECT ANSWER- ✔✔. results in an inflationary gap.
The Federal Reserve is able to have an impact on financial crises because it: - CORRECT
ANSWER- ✔✔B. conducts monetary policy.
The government has a budget surplus if: - CORRECT ANSWER- ✔✔its total revenues are
greater than its total expenditures.
,(Table: Production Possibilities Schedule II) Look at the table Production Possibilities
Schedule II. If an economy is producing at alternative X, the opportunity cost to it of
producing at Y is ________ units of consumer goods per period. - CORRECT ANSWER-
✔✔A. 6
Stagflation occurs when: - CORRECT ANSWER- ✔✔B. the aggregate price level rises and
the aggregate output level falls.
A sale of bonds by the Federal Reserve: - CORRECT ANSWER- ✔✔A. raises interest rates
and reduces the money supply.
When intermediate goods are included in the GDP calculation, it is referred to as: -
CORRECT ANSWER- ✔✔double counting.
One of the issues of importance to macroeconomists is: - CORRECT ANSWER-
✔✔understanding how living standards change over time.
(Figure: Aggregate Supply Movements) Refer to the accompanying figure called Aggregate
Supply Movements. In this figure, ________. - CORRECT ANSWER- ✔✔D. that there has
been an increase in the short-run aggregate supply
(Figure: Circular-Flow Model) If the circular-flow model is in equilibrium (the sum of money
flowing into each box is equal to the sum of the money flowing out of that box), which of the
following is likely to happen if there is a decrease in government spending? - CORRECT
ANSWER- ✔✔C. an increase in the unemployment rate
(Figure: Aggregate Demand) Using the accompanying figure, the quantity of output
demanded if the price level is 120 is: - CORRECT ANSWER- ✔✔A. $10 trillion.
The relation between a country's level of saving and investment: - CORRECT ANSWER-
✔✔D. affects its trade balances.
Deposit insurance: - CORRECT ANSWER- ✔✔provides depositors with assurances that they
will receive their deposits even if there are questions about a bank's soundness.
, The economy is in a recession. Which of the following is a fiscal policy that the government
should adopt to strengthen the economy? - CORRECT ANSWER- ✔✔An increase in
government purchases of goods and services.
When a local factory closes, why does it spell bad news for the local restaurants? -
CORRECT ANSWER- ✔✔Unemployed factory workers have lower incomes and are less
likely to dine out.
A share of stock is considered: - CORRECT ANSWER- ✔✔an asset for the owner of the
stock.
Menu costs of inflation are the - CORRECT ANSWER- ✔✔costs associated with businesses
changing prices.
When an economy's overall production grows faster than its population, it is referred to as: -
CORRECT ANSWER- ✔✔long-run growth per capita.
(Figure: The Labor Market) Refer to the accompanying figure on the labor market. What will
be the level of employment if firms decide to pay an efficiency wage of $16? - CORRECT
ANSWER- ✔✔80,000
(Table: Production of Good Z and Good X in Urbanville) Look at the table Production of
Good Z and Good X in Urbanville. If this represents the production possibility frontier and
Urbanville is currently producing at combination F, what is the opportunity cost of a move to
combination E? - CORRECT ANSWER- ✔✔5 of Z
A decrease in the supply of money shifts the aggregate: - CORRECT ANSWER- ✔✔.
demand curve to the left.
(Table: Balance Sheet) Refer to the information in the balance sheet. If the reserve ratio is
25%, deposits are: - CORRECT ANSWER- ✔✔$80,000.
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