Econ 203 Final Questions

9 Questions | Total Attempts: 314

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Machine Quizzes & Trivia

Final questions given to use before hand


Questions and Answers
  • 1. 
    The natural rate of unemployment is the.....
    • A. 

      Unemployment rate that would prevail with zero inflation

    • B. 

      Rate associated with the highest possible level of GDP

    • C. 

      Difference between the LR and SR unemployments

    • D. 

      Amount of unemployment the economy normally experiences

    • E. 

      None of them are right

  • 2. 
    The sticky price theory of the SRAS curve states that when prices fall unexpectedly some firms will have....
    • A. 

      Lower than desired prices which increases sales

    • B. 

      Higher than desired prices which increases sales

    • C. 

      Lower than desired prices which decreases sales

    • D. 

      Higher than desired prices which decreases sales

  • 3. 
    Which of the following is true concerning a CLOSED economy...
    • A. 

      Unmployment rises as the economy moves from A to B

    • B. 

      Either fiscal or monetary policy could be used to move the economy from B to A

    • C. 

      If the economy is left alone then as the economy moves from B to LR equilibrium the P level would fall farther

    • D. 

      All of the above

  • 4. 
    In a small open economy with perfect capital mobility if x-rates are fixed, AD could be increased by....
    • A. 

      Increase gov. expenditure

    • B. 

      Decreasing tax rates

    • C. 

      Increasing MS

    • D. 

      All of the above

    • E. 

      Only A and B

  • 5. 
    If the closed economy starts out at C and 1, then in the SR an increase in the MS growth rate moves the economy to.....
    • A. 

      A and 1

    • B. 

      B and 2

    • C. 

      C and 3

    • D. 

      None of the above

  • 6. 
    If the BoC reduces inflation by 2% and this makes the output fall by 12% and unemployment rises 4% the sacrifce ratio is....
    • A. 

      6

    • B. 

      4

    • C. 

      3

    • D. 

      2

    • E. 

      1/6

  • 7. 
    If the reserve ratio is 20% and banks do not hold excess reserves, when the BoC sells $40 million of bonds to the public, bank reserves....
    • A. 

      Increase by $40 million and Ms eventually increases by $200 million

    • B. 

      Increase by $40 million and Ms eventually increases by $800 million

    • C. 

      Decrease by $40 million and Ms eventually decreases by $200 million

    • D. 

      Decrease by $40 million and Ms eventually decreases by $800 million

  • 8. 
    Which list contains only actions that decrease the MS?
    • A. 

      Raise bank rate, make open market sales

    • B. 

      Raise bank rate, make open market purchases

    • C. 

      Lower bank rate, make open market purchases

    • D. 

      Lower bank rate, make open market sales

  • 9. 
    Arnold puts money into an account, 1yr later he checks and sees that he has 7% more money and that his money will buy 3% more goods
    • A. 

      Nominal int. rate = 4% and unempl. = 3%

    • B. 

      Nominal int. rate = 5% and unempl. = -1%

    • C. 

      Nominal int. rate = 6% and unempl. = 5%

    • D. 

      Nominal int. rate = 10% and unempl. = 3%

    • E. 

      None of the above

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