Econ Test Practise

158 Questions  I  By [email protected] on February 19, 2012

  

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1.  If consumption changes because of a change in the price level, then the
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2.  In the United States, by far the largest expenditure component in GDP is
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3.  The best reason economists take only final goods and services into account when calculating GDP is that
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4.  As the price level falls,
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5.  If in the process of calculating GDP, the market value of all intermediate goods is added to the market value of all final goods, this would
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6.  Suppose the market basket consists of 10X, 20Y, and 30Z. Current-year prices are $1.20 for each unit of X, $0.96 for each unit of Y, and $1.30 for each unit of Z. Base-year prices are $1.00 for each unit of X, Y, and Z. What is the approximate CPI in the current year?
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7.  If the CPI is 100 in the base year and 150 in the current year, how much did prices rise between these two years?
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8.  If Real GDP is greater than Natural Real GDP, the economy is in a(n)
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9.  A person in the civilian labor force falls into one of two categories:
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10.  In order to be classified as unemployed, a person must
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11.  In order to be classified as unemployed, a person must
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12.  If aggregate quantity supplied is greater than aggregate quantity demanded at a particular price level, then a
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13.  Suppose that C = $700, I = $200, G = $200, NX = $100, and that the money supply is equal to $400.  Based upon these assumptions, velocity is equal to ________________.  If consumption and velocity both rise beyond their initial levels, then it follows that another component of spending ___________ necessarily fall.
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14.  According to classical economists, the relationship between the amount of funds households plan to save and the interest rate is
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15.  Suppose the real exchange rate of 115 Japanese yen to the dollar moves to 105 yen to the dollar. The dollar has __________, making Japanese goods __________ expensive for Americans.
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16.  If the economy is in a recessionary gap,
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17.  The sum of durable goods, nondurable goods, and services equals
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18.  The CPI was 138 in one year and 146 the following year. Approximately how much did prices rise between the two years?
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19.  A market basket is made up of three goods, 10X, 12Y, and 18Z. The prices in the base year are $1.20, $2.10, and $3.25, respectively. The prices in the current year are $1.44, $2.23, and $3.88. What is the approximate consumer price index in the current year?
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20.  An increase in labor's productivity will cause the SRAS curve to shift __________ and the price level to __________.
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21.  If the economy is self-regulating and in an inflationary gap,
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22.  Which of the following items is a final good?
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23.  Greater wealth makes __________ people willing to spend the national income, causing __________ the economy's AD curve.
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24.  If a person is waiting to be called back to a job from which she has been laid off, how is she classified?
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25.  Personal income is
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26.  "Economic growth" has occurred if the
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27.  You have data for compensation of employees, proprietors' income, rental income, and net interest. Can you compute national income?
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28.  Suppose consumption decreases at each price level. As a result, aggregate demand __________, and the AD curve shifts __________.
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29.  One of the reasons why the AD curve slopes downward is that as the
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30.  If investment changes because of a change in the price level, then the
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31.  As interest rates rise, the  ____________ curve shifts _____________ resulting in a(n) 
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32.   If the economy is self-regulating and in a recessionary gap,
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33.  A falling interest rate affects the demand for consumer __________ and shifts AD to the __________.
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34.  If Real GDP was $8,742 billion in year 2 and it had been $8,509 billion in year 1, what was the approximate economic growth rate during this time period?
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35.  Look at the following data: personal income = $4,900 billion; personal taxes = $900 billion; transfer payments = $980 billion. What is disposable income?
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36.  The real balance effect is one of the
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37.  As the interest rate rises, the cost of a given investment project __________ and businesses invest __________.
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38.  As the interest rate rises, businesses invest __________ and the AD curve shifts to the __________.
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39.  What is the proper sequence of the phases of a business cycle?
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40.  Expectation of higher future income is a
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41.  Consumption expenditures $ 2,150 Federal government purchases of goods and services 250 State and local government’s purchases 331 Investment 692 Proprietors income 150 Compensation of employees 2,080 Corporate profits 134 Corporate profits taxes 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 146 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends                        0 Income Earned from the Rest of the World                     252 Income Earned by the Rest of the World                     667 Social Insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. What is the value of  personal income?
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42.  An appreciation of the U.S. dollar tends to __________ U.S. net exports and shift the U.S. AD curve to the __________.
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43.  Consumption expenditures $ 2,150 Federal government purchases of goods and services 250 State and local government’s purchases 331 Investment 692 Proprietors income 150 Compensation of employees 2,080 Corporate profits 134 Corporate profits taxes 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 146 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends                        0 Income Earned from the Rest of the World                     252 Income Earned by the Rest of the World                     667 Social Insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. What is the value of  national income?
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44.  Changes in which of the following will not cause the SRAS curve to shift?
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45.  In an economy with 100 million people, 70 million hold jobs and 19 million are not working but are looking for jobs. The unemployment rate is
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46.  If the price level is constant, but consumption increases, then the real balance effect will
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47.  When the economy is at its full employment Real GDP, the unemployment rate is equal to
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48.  If the SRAS curve intersects the AD curve to the left of Natural Real GDP, the economy is
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49.  The standard definition of "recession" is
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50.  Which of the following illustrates double counting?
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51.  Real GDP is always measured in
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52.  The natural rate of unemployment exists at
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53.  Given Change in Economic Factor Real GDP Price Level Increase in foreign real national income (1) (2) Decrease in wage rates (3) (4) Beneficial supply shock (5) (6) Decrease in government purchases (7) (8) Increase in personal income taxes (8) (10) Decrease in labor productivity (11) (12) Refer to Exhibit 8-2.  Based on the given change, what word (rises or falls) should go in blank (5) and blank (6), respectively, to summarize the resulting impact on short run equilibrium?
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54.  If the price level remains constant but the wage rate increases, then there will be __________ in production and the SRAS curve will shift __________.
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55.  Aggregate demand curves are
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56.  Which of the following is counted in GDP?
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57.  Given Change in Economic Factor Real GDP Price Level Increase in foreign real national income (1) (2) Decrease in wage rates (3) (4) Beneficial supply shock (5) (6) Decrease in government purchases (7) (8) Increase in personal income taxes (8) (10) Decrease in labor productivity (11) (12) Refer to Exhibit 8-2.  Based on the given change, what word (rises or falls) should go in blank (9) and blank (10), respectively, to summarize the resulting impact on short run equilibrium?
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58.  If the natural unemployment rate is 5 percent and the current unemployment rate is 6 percent, then the economy is
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59.  Suppose a drop in stock prices makes people feel less wealthy. This would cause __________ the economy's AD curve.
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60.  As the price level falls, ceteris paribus, people holding some of their wealth in monetary form become
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61.  If there are 10 job losers, 12 job leavers, 13 reentrants, and 12 new entrants, then there are __________ unemployed persons.
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62.  Given Change in Economic Factor Real GDP Price Level Increase in foreign real national income (1) (2) Decrease in wage rates (3) (4) Beneficial supply shock (5) (6) Decrease in government purchases (7) (8) Increase in personal income taxes (8) (10) Decrease in labor productivity (11) (12) Refer to Exhibit 8-2.  Based on the given change, what word (rises or falls) should go in blank (11) and blank (12), respectively, to summarize the resulting impact on short run equilibrium?
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63.  If investment changes because of a change in a factor other than the price level, then the
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64.  A decrease in the price level
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65.  Which of the following is not consistent with a self-regulating economy?
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66.  In an economy with 100 million people, 70 million hold jobs and 19 million are not working but are looking for jobs. The number counted as unemployed is
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67.  The real balance effect describes the change in
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68.  Suppose the real exchange rate of 10 Mexican pesos to the dollar moves to 9 pesos to the dollar. The dollar has ________________, making Mexican goods __________ expensive for Americans.
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69.  Which of the following statements is false?
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70.  The change in the purchasing power of dollar-denominated assets (such as cash holdings) is the
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71.  Part of the story of the interest rate effect is that a lower price level causes __________ in the supply of credit, which then causes the interest rate to __________.
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72.  If Real GDP is less than Natural Real GDP, the economy is in
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73.  The real balance effect helps to create "a change in
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74.  An increase in labor productivity shifts the
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75.  John just bought shares of stock in IBM for $10,000 and paid a $90 commission to his broker. How did this affect GDP?
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76.  The unemployment due to changes in the types of skills employers require is called __________ unemployment.
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77.  A decrease in the price of electricity will cause
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78.  An increase in the interest rate __________ purchases of consumer __________.
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79.  Which of the following is the correct equation for computing personal income?
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80.  Suppose there are 200 million people in the population, 120 million people in the civilian labor force, and 90 million people are employed.  The number of people unemployed is _______ million and the unemployment rate is ___________ percent.
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81.  Which of the following would not be included in the calculation of this year's GDP?
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82.  Which of the following would not be included in the measurement of GDP?
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83.  Consumption expenditures $ 2,150 Federal government purchases of goods and services 250 State and local government’s purchases 331 Investment 692 Proprietors income 150 Compensation of employees 2,080 Corporate profits 134 Corporate profits taxes 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 146 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends                        0 Income Earned from the Rest of the World                     252 Income Earned by the Rest of the World                     667 Social Insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. What is the value of  net domestic product?
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84.  Persons who are retired or engaged in own-home housework are considered to be in which of the following categories?
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85.  According to the classical theorists, it is impossible to have
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86.  Gross Domestic Product is computed by using
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87.  Given Change in Economic Factor Real GDP Price Level Increase in foreign real national income (1) (2) Decrease in wage rates (3) (4) Beneficial supply shock (5) (6) Decrease in government purchases (7) (8) Increase in personal income taxes (8) (10) Decrease in labor productivity (11) (12) Refer to Exhibit 8-2.  Based on the given change, what word (rises or falls) should go in blank (1) and blank (2), respectively, to summarize the resulting impact on short run equilibrium?
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B.
C.
D.
88.  Smith's income was $50,000 in year 1 and $55,600 in year 2. The CPI was 114 in year 1 and 124 in year 2. What was the approximate percentage change in Smith's real income between the two years?
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89.  Which of the following does GDP omit?
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90.  Gross Domestic Product (GDP) is the total market value of all
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91.  Suppose the price level is rising and it is widely forecast to rise even further. This forecast might cause __________ of some consumption plans, resulting in __________ the AD curve.
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92.  The civilian non-institutional population can be broken down into two groups:
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93.  Durable goods $2,000 Services   4,000 Business purchases of capital goods     200 Fixed investment    600 Exports     600 Imports     800 Nondurable goods     500 Inventory investment                300 Government transfer payments     400 Purchases of new residential housing     400 Government purchases     900   111.   Refer to Exhibit 7-3.  Net exports is equal to
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94.  Juan lost his job as a nuclear physicist working for a defense contractor.  He can not find a job because no firms in the defense industry or any other industry are hiring people with his skills.  Juan is ______________ unemployed.
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D.
95.  Consumption expenditures $ 2,150 Federal government purchases of goods and services 250 State and local government’s purchases 331 Investment 692 Proprietors income 150 Compensation of employees 2,080 Corporate profits 134 Corporate profits taxes 23 Rental income 31 Capital consumption allowance 295 Indirect business taxes 146 Net interest 147 Exports 300 Imports 320 Undistributed corporate profits 111 Transfer payments 66 Personal taxes 45 Dividends                        0 Income Earned from the Rest of the World                     252 Income Earned by the Rest of the World                     667 Social Insurance taxes 222 Statistical discrepancy 5 Refer to Exhibit 7-1. Which of the following summations represents personal income?
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B.
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D.
96.  Disposable income is
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