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Econtwo Finals (make-up)

74 Questions  I  By Aizelle_andrade
ECONTWO FINALS (MAKE-UP)
Final Exam. Please be honest. Refrain from searching for or asking for the answers. You may use calculators and scratch papers. This is a timed exam. You are given 40 minutes to finish the exam. Once you submit your answers, you can no longer go back. You are only given 1 try. Good luck! :)

  
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1.  What sequence of events results from a decrease in aggregate demand?
A.
B.
C.
D.
2.  If you hear a person saying ʺI lost my job because I was replaced by a machine,ʺ you should conclude that this person is ________ unemployed.
A.
B.
C.
D.
3.  Fiscal policy affects the goods market through
A.
B.
C.
D.
4.  You can purchase shares of stock either through IPO (Initial Public Offering) or through the open market. Shares sold through IPOs are offered for the first time to the public by the company (primary market) whereby proceeds of the sale go directly to the company. Shares of listed or publicly traded companies are bought during trading (open market). These shares have since been transferred from one owner to another (secondary market) and proceeds of the sales do not go directly to the company but to the owners of the shares
A.
B.
5.  Money demand is a function of all of the following EXCEPT
A.
B.
C.
D.
6.  The two links between the goods market and the money market are
A.
B.
C.
D.
7.  Each point on the IS curve represents the equilibrium point in the
A.
B.
C.
D.
8.  Which of the following increases the price of the dollar relative to the peso?
A.
B.
C.
D.
9.  A Big Mac costs $3 in the United States and 2 euros in Spain. The purchasing power parity theory would predict that the exchange rate in the long run is
A.
B.
C.
D.
10.  In an economy, when the price level falls, consumers and firms buy more goods and services. This relationship is represented by the
A.
B.
C.
D.
11.  Suppose the exchange rate between the United States and Japan changed from $1 =150 yen to $1 = 140 Yen, which of the following statements is TRUE?
A.
B.
C.
D.
12.  If planned aggregate expenditures are $400 billion, consumption is $120 billion, investment is $60 billion, government spending is $70 billion, there is a
A.
B.
C.
D.
13.  It is very important to distinguish between the short run and the long run when we are discussing
A.
B.
C.
D.
14.  Suppose the wage rate in the labor market is $15 and the demand for labor decreases. If wages are sticky,
A.
B.
C.
D.
15.  The policy mix of a contractionary fiscal policy and a contractionary monetary policy would cause output to ________, and interest rates to ________.
A.
B.
C.
D.
16.  When the general price level rises,
A.
B.
C.
D.
17.  The balance of payments is divided into two major accounts, the
A.
B.
C.
D.
18.  The rise in value of the Mexican peso relative to the Canadian dollar is a(n)
A.
B.
C.
D.
19.  When a countryʹs exports of goods are greater than its imports of goods in a given period, it has a
A.
B.
C.
D.
20.  If the Fed decreases the money supply at the same time the federal government decreases government spending, the crowding-out effect
A.
B.
C.
D.
21.  Which of the following sequence of events follows an increase in net taxes?
A.
B.
C.
D.
22.  An increase in government purchases shifts the ________ curve to the ________.
A.
B.
C.
D.
23.  The difference between a countryʹs merchandise exports and its merchandise imports is the
A.
B.
C.
D.
24.  More German companies start to invest in the United States. This will lead to a(n)
A.
B.
C.
D.
25.  Which of the following is determined in the money market?
A.
B.
C.
D.
26.  Trading from 12:00pm to 12:10pm is called the run-off and all trades are executed at closing price
A.
B.
27.  Fiscal policy affects the money market through its effect on
A.
B.
C.
D.
28.  If the MPM is 0.1, then a $3,500 increase in income will
A.
B.
C.
D.
29.  The unemployment rate is
A.
B.
C.
D.
30.  An Italian citizen buys a U.S. bond. This transaction will be entered as
A.
B.
C.
D.
31.  Coal is used as a source of energy in many manufacturing processes. Assume a long strike by coal miners reduced the supply of coal and increased the price of coal. This would cause
A.
B.
C.
D.
32.  If planned investment is sensitive to the interest rate, an increase in the interest rate causes the
A.
B.
C.
D.
33.  If two countries donʹt trade with each other, an increase in the price level in one country
A.
B.
C.
D.
34.  The aggregate demand shifts to the left if
A.
B.
C.
D.
35.  At every point along the aggregate demand curve, the level of aggregate output demanded is
A.
B.
C.
D.
36.  Planned aggregate expenditure in an open economy equals
A.
B.
C.
D.
37.  China is taking steps to cool its economy and fight inflation at the same time the Federal Reserve is trying to boost economic growth and ward off the threat of deflation, a destabilizing drop in prices and wages. The Fed launched a $600 billion bond-purchase program earlier this month, hoping to lower interest rates and spur more borrowing and spending
A.
B.
38.  A decrease in net taxes at a given price level leads to
A.
B.
C.
D.
39.  The policy mix that would cause the interest rate to increase and investment to decrease, but have an indeterminate effect on aggregate output, is a mix of
A.
B.
C.
D.
40.  If you are concerned that the inflation rate is too high, which of the following policies would you recommend?
A.
B.
C.
D.
41.  Imports
A.
B.
C.
D.
42.  An increase in U.S. exports to Japan ________ the demand for U.S. dollars and ________ the supply of yen.
A.
B.
C.
D.
43.  When changes in the price level cause changes in the interest rate and, thus, changes in aggregate output demanded, we call this effect
A.
B.
C.
D.
44.  The open economy multiplier will decrease if
A.
B.
C.
D.
45.  The price of one countryʹs currency in terms of another countryʹs currency is the
A.
B.
C.
D.
46.  As the price level in the economy increases, which of the following sequence of events occurs?
A.
B.
C.
D.
47.  The market in which the equilibrium level of aggregate output is determined is the
A.
B.
C.
D.
48.  The severity of the crowding-out effect will be reduced if
A.
B.
C.
D.
49.  Ireland’s competitive advantages over other European countries are highly-skilled labor force and a 12.5% corporate tax rate
A.
B.
50.  An example of a contractionary monetary policy is
A.
B.
C.
D.
51.  Philippine Stock Exchange has two trading floors, Ortigas and Ayala trading floors, but it is the only exchange in the country
A.
B.
52.  In the Philippines, the rate for the bellwether 91-day T-bill only reached 0.775 percent from the previous rate of 1.48 percent. This was the first time the interest rate for a government debt security fell below one percent
A.
B.
53.  The aggregate supply curve
A.
B.
C.
D.
54.  Suppose that airline workers are laid off during a recession because of an unspoken agreement between airline workers and airline executives that wages will not be reduced. This example is consistent with the
A.
B.
C.
D.
55.  The open-economy multiplier ________ the closed-economy multiplier.
A.
B.
C.
D.
56.  Which of the following sequence of events is TRUE?
A.
B.
C.
D.
57.  A decrease in the quantity of money supplied at a given price level causes
A.
B.
C.
D.
58.  Maktrade system is an auction trading system based on price and time priority.
A.
B.
59.  Which of the following decreases the price of the dollar relative to the British pound?
A.
B.
C.
D.
60.  Which of the following is NOT a reason why firms pay efficiency wages?
A.
B.
C.
D.
61.  If the economy is operating on the relatively vertical segment of the aggregate supply curve, an increase in aggregate demand causes a ________ change in the price level and a ________ change in output.
A.
B.
C.
D.
62.  The curve that illustrates the positive relationship between the equilibrium values of aggregate output and the interest rate in the money market is the
A.
B.
C.
D.
63.  If planned investment is perfectly unresponsive to changes in the interest rate, the planned investment schedule
A.
B.
C.
D.
64.  Which of the following equations represents equilibrium in the goods market?
A.
B.
C.
D.
65.  The type of unemployment that arises during recessions is known as
A.
B.
C.
D.
66.  Which of the following statements is TRUE?
A.
B.
C.
D.
67.  Each point on the LM curve represents the equilibrium point in the
A.
B.
C.
D.
68.  When income increases, the money demand curve shifts to the ________, which ________ the interest rate with a fixed money supply
A.
B.
C.
D.
69.  A policy mix of an expansionary fiscal policy and an expansionary monetary policy would cause output to ________ and interest rates to ________.
A.
B.
C.
D.
70.  Japan imports over 90% of its consumption of oil. If the price of oil increases, Japanʹs
A.
B.
C.
D.
71.  In China, in order to cool inflation that surged to a 25-month high in October, the state-owned banking industry was ordered to set aside an additional 0.5 percent of deposits as reserves, effective Nov. 29. Reserves vary by institution but could be as high as 19 percent for the biggest commercial lenders
A.
B.
72.  Which of the following is an example of an expansionary fiscal policy?
A.
B.
C.
D.
73.  Ask price is the lowest price a seller of a security is willing to take for a unit of a security at a particular time. Also called "offer price".
A.
B.
74.  Which of the following arguments is NOT offered to explain the existence of ʺstickyʺ wages?
A.
B.
C.
D.
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