Econ Final

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1.  Which of the following is considered an outside lag of economic policy?.
A.
B.
C.
D.
2.  Monetizing the deficit refers to:
A.
B.
C.
D.
3.  A limit pricing strategy implies charging a price that is less than the 
A.
B.
C.
D.
4.  The marginal external cost of pollution means
A.
B.
C.
D.
5.  Given powers granted to the Fed since 2008, and setting aside extreme crisis conditions, which of the following interest rates would normally be expected to be the highest?
A.
B.
C.
D.
6.  A country has a large budget deficit that is financed by creation of new money (monetization) . As a result, the country has a serious danger of 
A.
B.
C.
D.
7.  A recession is a 
A.
B.
C.
D.
8.  Assume that a fixed cost, such as property taxes, increases for firms in a perfectly competitive industry. What will be the short-run impact on the output level of individual firms?
A.
B.
C.
D.
9.  Which of the following describes a special type of expansionary monetary policy that can be used even when nominal interest rates are near the zero interest rate bound?
A.
B.
C.
D.
10.  In long-run equilibrium for a perfectly competitive firm, ATC equals:
A.
B.
C.
D.
11.  A bank is subject to a 20 percent required-reserve ratio. When this bank receives a deposit of  $1,000, its 
A.
B.
C.
D.
12.  If an individual member of a cartel could be certain of escaping detection, it would be tempted to cheat by 
A.
B.
C.
D.
13.  Which of the following markets can contain a number of firms producing differentiated products?
A.
B.
C.
D.
14.  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.
15.  If the equilibrium price of sugar is 15 cents per pound and government imposes a minimum price of 20 cents per pound, the likely result will be
A.
B.
C.
D.
16.  A firm is said to experience economies of scale over the range of output for which long-run average cost
A.
B.
C.
D.
17.  The money multiplier is 5, a $100,000 open market purchase by the Fed will cause the money stock to
A.
B.
C.
D.
18.  Other things being equal, which of the following would tend to cause the British pound to appreciate?
A.
B.
C.
D.
19.  Which of the following best describes the policy of the Fed?
A.
B.
C.
D.
20.  Which of the following is likely to be greater if accommodating policy is used after a supply shock than if there is no accommodating policy?
A.
B.
C.
D.
21.  Which of the following could be considered a significant barrier to entry into a market? 
A.
B.
C.
D.
22.  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.
23.  In the United States the interbank loan market where banks borrow reserves from one another is called
A.
B.
C.
D.
24.  The interest rate charged by the Fed on loans of reserve to banks is known as the 
A.
B.
C.
D.
25.  A situation in which monetary policy loses its effectiveness, interest rates are low, and people accumulate large amounts of cash is called
A.
B.
C.
D.
26.  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.
27.  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.
28.  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.
29.  The total of consumer plus producer surplus under simple monopoly will tend to be 
A.
B.
C.
D.
30.  A rise in the price of coffee is likely to have which of the following initial effects on the market for tea, a subsitute?
A.
B.
C.
D.
31.  A point representing 500 roast turkey dinners and 600 steak dinners lies outside the production possibilty frontier of Joe's Restaurant, given the factors of production and technology available to it. This means that
A.
B.
C.
D.
32.  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.
33.  If a country has an unsustainable debt pyramid, it must
A.
B.
C.
D.
34.  If a monopolist is operating at a point where its marginal revenue curve is less than marginal cost but P is greater than AVC, the firm should do which of the following?
A.
B.
C.
D.
35.  Deficits or surpluses of state and local governments
A.
B.
C.
D.
36.  Which of the following would be most likely to cause the production possibility frontier for education and cars to shift outward?
A.
B.
C.
D.
37.  Which of the following is a source of diseconomies of scale?
A.
B.
C.
D.
38.  During the Great Depression of the 1930's 
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B.
C.
D.
39.  Which of the following is likely to make tacit coordination more difficult in an oligopolistic market?
A.
B.
C.
D.
40.  Which of the following adds reserves to the banking system?
A.
B.
C.
D.
41.  In a democracy, which of the following voting groups is most likely to see their desired level of pollution control met?
A.
B.
C.
D.
42.  Environmental problems and policies provide numerous examples of
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B.
C.
D.
43.  The cap-and-trade system controls pollution through
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B.
C.
D.
44.  Taking everything into account, which of the following kinds of monopoly is most likely to pose a serious problem of market failure?
A.
B.
C.
D.
45.  The Clean Air Act, after amendments in the 1990's, uses which of the following to control acid rain?
A.
B.
C.
D.
46.  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.
47.  On the whole, it appears that inside and outside lags for fiscal policy are 
A.
B.
C.
D.
48.  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.
49.  Which of the following best characterizes economists' attitudes toward price discrimination?
A.
B.
C.
D.
50.  A country that experiences a period of falling prices accompanied by falling real output and rising unemployment is suffering from
A.
B.
C.
D.
51.  Firms in a competitive industry are said to be price takers because:
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B.
C.
D.
52.  An industry with an eight-firm concentration ratio of 95 percent and a formal agreement on prices and output among the top eight firms would best be described as
A.
B.
C.
D.
53.  If a country exports fish and imports wheat, an interruption of trade will be likely to decrease
A.
B.
C.
D.
54.  When the economy is in a liquidity trap, which of the following is likely to increase fastest?
A.
B.
C.
D.
55.  It takes 5 labor hours to produce a ton of steel in Japan and 3 labor hours in the United States, and it requires 20 labor hours to produce a car in Japan and only 15 labor hours in the United States. If Japan and the United States were the only two countries involved in trade, we would expect
A.
B.
C.
D.
56.  If consumer incomes go up, which of the following is initially most likely?
A.
B.
C.
D.
57.  Rising marginal cost of production is due primarily to: 
A.
B.
C.
D.
58.  Which of the following is counted as part of M2?
A.
B.
C.
D.
59.  The cap-and-trade appraoch is sometimes opposed by environmentalists because they
A.
B.
C.
D.
60.  A tax on imports is known as a: 
A.
B.
C.
D.
61.  In Norway, it takes 5 labor hours to produce a ton of wheat and 5 to produce a ton of fish; in Greece it takes 3 labor hours to produce a ton of wheat and 3 to produce a ton of fish. If these are the only two goods and only two trading countries, we would expect
A.
B.
C.
D.
62.  According to international trade theory, a country should
A.
B.
C.
D.
63.  A flow of funds from financial markets to the government indicates that 
A.
B.
C.
D.
64.  Which of the following is an example of price discrimination?
A.
B.
C.
D.
65.  Assume an increase in the price of beef increases the demand for pork. Restoration of equilibrium in the pork market will require
A.
B.
C.
D.
66.  Which of the following is an example of a supply shock that would shift the aggregate supply curve upward?
A.
B.
C.
D.
67.  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.
68.  When the economy approaches the peak of a business cycle
A.
B.
C.
D.
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