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Econ Final

68 Questions  I  By AshyMSU
Econ Final

  
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1.  The country of Dispepsia is experiencing run-away inflation. As a strong measure to stabilize prices, the Dispepsian central bank could try which of the following policies?
A.
B.
C.
D.
2.  All banks in a simple banking system have a target reserve ratio of 12.5 percent and deposits are the only form of money. The value of the money multiplier for this simplified banking system is
A.
B.
C.
D.
3.  Environmental problems and policies provide numerous examples of
A.
B.
C.
D.
4.  A recession is a 
A.
B.
C.
D.
5.  During the Great Depression of the 1930's 
A.
B.
C.
D.
6.  Scarcity is
A.
B.
C.
D.
7.  If the short-run  aggregate supply curve intersects the aggregate demand curve at a point to the right of the natural level of real output, then, over time, the expected level of input prices will tend to
A.
B.
C.
D.
8.  Which of the following adds reserves to the banking system?
A.
B.
C.
D.
9.  Other things being equal, which of the following would tend to cause the British pound to appreciate?
A.
B.
C.
D.
10.  If planned investment equals saving, government purchases equal net taxes, and the economy's exports and imports are equal, then
A.
B.
C.
D.
11.  If the Fed chose to increase the rate it charges banks on loans of resrves, the money supply would:
A.
B.
C.
D.
12.  The marginal external cost of pollution means
A.
B.
C.
D.
13.  The market for hair styling services in a medium- to large-sized community would best be described as which of the following?
A.
B.
C.
D.
14.  A firm in a perfectly competitive industry that wants to maximize profits will produce at an output level where:
A.
B.
C.
D.
15.  At the market equilibrium in a perfectly competitive market, consumer surplus is
A.
B.
C.
D.
16.  The government's primary budget deficit takes into account all expenditures except which of the following?
A.
B.
C.
D.
17.  Which of the following market structures is likely to have the most barriers to entry?
A.
B.
C.
D.
18.  The optimal quantity of pollution is found at the point where the marginal cost of pollution abatement curve crosses
A.
B.
C.
D.
19.  Where the marginal cost curve is below the average variable cost curve, 
A.
B.
C.
D.
20.  Rising marginal cost of production is due primarily to: 
A.
B.
C.
D.
21.  The Clean Air Act, after amendments in the 1990's, uses which of the following to control acid rain?
A.
B.
C.
D.
22.  Suppose the target reserve ratio for the banking system is 10 percent and deposits are the only form of money. If the central bank supplies $1,000 in new reserves though an open market operation, the money stock will increase by how much after bankds use the new reserves as a basis for additional loans?
A.
B.
C.
D.
23.  Trade in meat and wheat between two countries is least likely to be profitable if
A.
B.
C.
D.
24.  As a percentage of GDP, which of the following is larger in China than in the United States?
A.
B.
C.
D.
25.  Starting from a point of long-run equilibrium, the intial effects of demand-side inflation would include an increase in
A.
B.
C.
D.
26.  In a certain year, the economy has a negative output gap and a buget deficit of $100 billion. If taxes and spending laws were the same, but real output were at its natural level, the budget deficit would be $25 billion. From this information, it appears that in this year the economy has
A.
B.
C.
D.
27.  Economic forecasts tend to be most accurate in which of the following cases?
A.
B.
C.
D.
28.  Let C stand for consumption, I for total investment, G for government purchases, Ex for exports, Im for imports, S for saving, and T for net taxes. Which of the following equations always holds?
A.
B.
C.
D.
29.  Which of the following is not a component of domestic product?
A.
B.
C.
D.
30.  An unexpected increase in the rate of inflation will tend to
A.
B.
C.
D.
31.  If expansionary monetary policy is used to hold real output above its natural level for several years in a row, the result is likely to be
A.
B.
C.
D.
32.  Assuming gasoline and tires to be complementary goods, the intial effect on the tire market of an increase in the price of gasoline (other things being equal), would be best described as?
A.
B.
C.
D.
33.  A perfectly competitive firm sells its output for $50 a unit. At 1,000 units of output, marginal cost is $40 and is increasing, average variable cost is $35, and average total cost is $60. To maximize short-run profit, what should the firm do?
A.
B.
C.
D.
34.  If the steelworkers' union negotiates a new contract with sharply higher wages, we would expect, once a new equilibrium is reached in the steel market,
A.
B.
C.
D.
35.  If the price of leather increases, other things being equal, which of the following would be the most likely initial effect?
A.
B.
C.
D.
36.  Budget items like social security and Medicare that are not subject to annual appropriations are known as
A.
B.
C.
D.
37.  Suppose the Fed announces a target federal funds rate of 3 percent. Changing market conditions then increase banks' demand for reserves. Which of the following actions would help the Fed to hold the federal funds rate close to its target?
A.
B.
C.
D.
38.  If firms in a monopolistically competitive industry are earning pure economic profits in short-run equilibrium, we will expect the number of firms to
A.
B.
C.
D.
39.  Faster economic growth necessarily causes
A.
B.
C.
D.
40.  If the money stock (M2) is $400 billion, real income is $500 billion, and the price level is 2.0, then velocity must be
A.
B.
C.
D.
41.  In the absence of trade, world production will tend to be
A.
B.
C.
D.
42.  The cap-and-trade system controls pollution through
A.
B.
C.
D.
43.  According to a supply and demand analysis, the likely effect of a minimum wage law would be
A.
B.
C.
D.
44.  Assume that England and Germany both produce wheat and oatmeal with England possessing the absolute advantage in the production of both wheat and oatmeal and the comparative advantage in wheat. We would expect
A.
B.
C.
D.
45.  If the equilibrium price of natural gas is $2.50 per thousand cubic feet and a price ceiling is imposed of $3 per thousand cubic feet, the likely result will be
A.
B.
C.
D.
46.  The command-and control approach to pollution control can best be described by which statement?
A.
B.
C.
D.
47.  In long-run equilibrium for a perfectly competitive firm, ATC equals:
A.
B.
C.
D.
48.  Policies to control unemployment are primarily a concern of 
A.
B.
C.
D.
49.  The required-reserve ratio is the minimum reserves that the central bank requires a bank or thrift to hold stated as a percentage of
A.
B.
C.
D.
50.  Because of the multiplier effect, a $100 increase in planned investment tends ot cause an increase of more than $100 in 
A.
B.
C.
D.
51.  On the whole, it appears that inside and outside lags for fiscal policy are 
A.
B.
C.
D.
52.  When the economy is in a liquidity trap, which of the following is likely to increase fastest?
A.
B.
C.
D.
53.  An early study by Joe Bain concluded that
A.
B.
C.
D.
54.  A Taylor rule favors use of which of the following intermediate targets byt he central bank?
A.
B.
C.
D.
55.  If a pure monopolist can sell 100 units of output at $50 per unit and 101 units of output at $49.99 per unit, marginal revenue in that range of output is approximately
A.
B.
C.
D.
56.  Deficits or surpluses of state and local governments
A.
B.
C.
D.
57.  Which of the following is best represented by a positively sloped curve?
A.
B.
C.
D.
58.  Which of the following produces an effect that is properly represented by a movement along a given aggregate demand curve?
A.
B.
C.
D.
59.  A tax on imports is known as a: 
A.
B.
C.
D.
60.  If an individual member of a cartel could be certain of escaping detection, it would be tempted to cheat by 
A.
B.
C.
D.
61.  Which of the following is required for every market?
A.
B.
C.
D.
62.  Which of the following tends to increase during hyperinflation?
A.
B.
C.
D.
63.  An episode during which real ouput drops below its natural level while unemployment and the price level both rise is best described as
A.
B.
C.
D.
64.  Which of the following is an example of normative economics
A.
B.
C.
D.
65.  The "other things being equal" clause in the law of demand covers
A.
B.
C.
D.
66.  Which of the following will produce a rightward shift in the aggregate demand curve?
A.
B.
C.
D.
67.  Beginning from a point of long-run equilibrium, suppose there is a rightward shift in the aggregate demand curve. In the course of the intial move toa new short-run equilibrium, it is likely that
A.
B.
C.
D.
68.  Using Qs to indicate quantity supplied and Qd to indicate quantity demanded, which of the following circumstances would be likely to produce an upward movement of the price of a good?
A.
B.
C.
D.
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