the final is due tomorrow its multiple choice and also consists of questions that need to be answered in a paragraph pleas help asap

Final Exam

Question 1

Which of the following does not shift the aggregate demand curve?

Choose one answer.

a. an increase in the supply of money

b. an increase in GDP in Japan

c. a decrease in taxes

d. a decrease in the price level

Question 2

is anything that serves as a medium of exchange.

is anything that is widely accepted as a means of payment.

occurs when goods are exchanged directly for other goods.

a consistent means of measuring the value of things.

an item that holds value over time.

the sum of all past federal deficits, minus any surpluses.

The actions of a central bank, currency board or other regulatory committee that determine the size and rate of growth of the money supply, which in turn affects interest rates.

the use of government expenditures and taxes to influence the level of economic activity.

Any government program that tends to reduce fluctuations in GDP automatically

Question 3

Indicate whether each of the following is a topic of microeconomics or macroeconomics:

The impact of higher oil prices on the production of steel

The increased demand in the last 15 years for exotic dietary supplements

The surge in aggregate economic activity that hit much of Asia late in the early 2000s

The sharp increases in U.S. employment and total output that occurred between 2003 and 2007

The impact of preservation of wilderness areas on the logging industry and on the price of lumber

Question 4

Adam Smith used the metaphor of the invisible hand to explain how _________.

Choose one answer.

a. markets mismatch buyers and sellers

b. the butcher and the baker are benevolent

c. people acting in their own self-interest promote the interest of society as a whole

d. the production possibilities frontier illustrates efficient outcomes

Question 5

Which of the following would be a macroeconomic question?

Choose one answer.

a. What is the relationship between inflation and unemployment?

b. How many computer programmers will be demanded by firms next year?

c. How many automobiles will be produced next year?

d. What percentage of workers belongs to a union?

Question 6

Which of the following wrote The General Theory of Employement, Interest, and Money?

Choose one answer.

a. John Maynard Keynes

b. Karl Marx

c. Adam Smith

d. Milton Friedman

Question 7

This is an example of an Economic Indicator

Choose one answer.

a. Unemployment Rate

b. GDP

c. The inflation rate

d. All of the above

Question 8

Money is _________.

Choose one answer.

a. anything that is regularly used in economic transactions or exchanges

b. necessary to conduct economic transactions

c. facilitates specialization in production

d. anything that has value

Question 9

To be defined as unemployed a person must _________.

Choose one answer.

a. not have a job

b. not have a job and must have looked for work at some time

c. not have a job and must be actively looking for work

d. working less than their desired amount of time

Question 10

Income after taxes is known as _________.

Choose one answer.

a. tax-free income

b. marginal income

c. disposable personal income

d. sheltered income

Question 11

A tariff is a ________.

Choose one answer.

a. limit on the quantity of a good that can be imported into a country

b. tax on imports

c. voluntary agreement between two countries to limit exports

d. strict enforcement of health laws

Question 12

Macroeconomics is best described as the study of _________.

Choose one answer.

a. very large issues

b. the choices made by individual households, firms and governments

c. the nation’s economy as a whole

d. the relationship between inflation and wage inequality

Question 13

Consider Figure 8.1, which depicts the supply and demand for coal. Assume coal production creates external costs. If the government imposes a pollution tax on coal production the _________.

Choose one answer.

a. supply curve of coal would shift to the left

b. supply curve of coal would shift to the right

c. demand curve for coal would shift to the left

d. demand and supply curves for coal would shift to the left

Question 14

Gross domestic product calculations count only final goods and services because _________.

Choose one answer.

a. these are the only goods and services that are purchased in an economy

b. counting all goods and services would lead to double-counting of many activities

c. it is difficult to measure the prices of intermediate goods produced

d. one cannot calculate the quantities of intermediate goods produced

Question 15

Countries that participate in international trade are able to consume more of all goods and services then they could consume while producing in isolation from the rest of the world.


True False

Question 16

Economics is best defined as the study of _________.

Choose one answer.

a. financial decision-making

b. how consumers make purchasing decisions

c. choices made by people faced with scarcity

d. inflation, unemployment and economic growth

Question 17

The study of the aggregate economy is known as _________.

Choose one answer.

a. microeconomics

b. political science

c. macroeconomics

d. labor economics

Question 18

the business cycle is measuring the growth of _________ over time.

Choose one answer.

a. output

b. prices

c. employment

d. inflation

Question 19

Match the key terms and definitions

Short for real gross domestic product, is the total value of all final goods and services produced during a particular year or period, adjusted to eliminate the effects of changes in prices.

a statistic, such as the unemployment rate, GDP, or the inflation rate, which indicates how well the economy is doing and how well the economy is going to do in the future.

is an increase in the average level of prices Inflation is measured as the annual rate of increase in the average level of prices.

is a decrease in the average level of prices.

is generally defined as an inflation rate in excess of 200% per year.

a number whose movement reflects movement in the average level of prices.

a price index whose movement reflects changes in the prices of goods and services typically purchased by consumers.

the percentage of the labor force that is unemployed.

the value of total output measured in current prices.

Question 20

Which of the following represent the four stages of the business cycle order?

Choose one answer.

a. trough, expansion, peak and recession

b. trough, expansion, recession and peak

c. trough, peak, expansion and recession

d. trough, recession, expansion and peak

Question 21

Marks: 10

List three instances when you or someone you know has been unemployed. For each, explain the type of unemployment, such as frictional, structural, or cyclical.



Question 22

A country has a comparative advantage in the production of a good if it can produce that good with fewer raw materials than can other countries.

True False

Question 23

Match the following terms and definitions.

A stabilization policy designed to increase real GDP

A stabilization policy that reduces the level of GDP

the use of government purchases, transfer payments, and taxes to influence the level of economic activity.

the use of central bank policies to influence the level of economic activity.

A policy in which the government or central bank acts to move the economy to its potential output

Question 24

The relationship between the level of prices and the quantity of real GDP supplied is known as _________.

Choose one answer.

a. aggregate supply

b. market supply

c. aggregate demand

d. market demand

Question 25

A quota ________.

Choose one answer.

a. imposes a tax on goods entering the country

b. limits the quantity of goods entering the country

c. limits the quantity of goods leaving the country

d. subsidizes the production of goods leaving the country

Question 26

Explain each of the four components of GDP.


Question 27

The aggregate demand curve is _________.

Choose one answer.

a. downward sloping

b. upward sloping

c. a vertical line at potential output

d. a horizontal line at the current price level

Question 28

A decrease in the income tax rate ______ the value of the multiplier.

Choose one answer.

a. has no effect on

b. may increase or decrease

c. increases

d. decreases

Question 29

The opportunity cost of something is _________.

Choose one answer.

a. the cost of the labor used to produce it

b. the best alternative you sacrifice to get it

c. the price charged for it

d. the search cost required to find it

Question 30

Which of the following is a microeconomic statement?

Choose one answer.

a. Aggregate worker productivity increased by two percent in 1997.

b. The price of apples decreased by five percent last year.

c. Real domestic output in Cambodia increased ten percent from 1995 to 1996.

d. Unemployment was seven percent of the labor force in 1995.

Question 31

Tomatoes grow well in Kansas. Why do the people of Kansas buy most of their tomatoes from Florida, Mexico, and California? Opportunity cost?


Question 32

Match the economic theory to the correct school of thought.

a macroeconomic school of thought that emphasizes the long run and reliance upon market forces to achieve full employment.

a macroeconomic school of thought that emphasizes the sort run and the importance of fiscal policy.

a body of macroeconomic thought that stresses the stickiness of prices and the need for activist stabilization policies through the manipulation of aggregate demand to keep the economy operating close to its potential output.

holds that changes in the money supply are the primary cause of changes in nominal GDP.

Question 33

Actions by the Federal Reserve to influence the level of GDP are known as ________.

Choose one answer.

a. monetary policy

b. fiscal policy

c. cyclical policy

d. procyclical policy

Question 34

What is the difference between Fiscal Policy and Monetary Policy?


Question 35

Barter transactions will occur only when _________.

Choose one answer.

a. no money exists

b. neither party to the exchange has a comparative advantage in the goods being traded

c. there exists a double coincidence of wants

d. money does not have a store of value

Question 36

A firm’s total revenue is the _________.

Choose one answer.

a. money the firm gets by selling its product, less the cost involved in producing that amount of output

b. extra amount of money that a firm gets by selling a marginal unit of its product, irrespective of its costs of production

c. money the firm gets by selling all units of its product, irrespective of the costs of production

d. price of the product times the marginal cost of production

Question 37

A good synonym for elasticity would be _________.

Choose one answer.

a. change

b. demand

c. responsiveness

d. stickiness

Question 38

State the essential difference between the classical and Keynesian schools of thought. If you were a public policymaker and received conflicting advice from a classical and a Keynesian economist, how would you choose? Explain.


Question 39

Which one of the following statements is true of the Consumer Price Index?

Choose one answer.

a. It does not take account of the price of imported goods and services.

b. The goods used to construct the index do not change from month to month.

c. It does not take into account the price of used goods.

d. It understates the true rate of inflation.

Question 40

Marks: 10

Name some of the services, if any, you produced at home that do get counted in GDP. Are there any goods you produce that are not counted?


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