19/19  

that's 100%
 
RETAKE
19 questions were answered correctly.
1
The president gives his annual State of the Union speech on television and discusses the
loss of manufacturing jobs to China and the need for the United States to create more jobs
in order to make up for this.

This describes which of the following types of unemployment?


Structural


Seasonal


Cyclical


Frictional

CONCEPT
 Unemployment/Full Employment - Frictional / Structural / Cyclical
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2
Select the income elasticity that corresponds to a normal good.


Income elasticity is negative and less than -1.


Income elasticity is zero.


Income elasticity is -1.


 Income elasticity is positive and less than 1.

CONCEPT
 Elasticity
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3

Using the image shown here, which of the following flows from the government to
firms?   


Taxes


Purchases of goods and services 


Imports


Wages, interest and transfer payments

CONCEPT
 Circular Flow Diagram
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4
Which statement below is true regarding aggregate supply?


AS has no quantity limit.


It is not used that often in macroeconomics.


Two curves represent AS.


It is influenced by the wealth effect.
CONCEPT
 Aggregate Supply and Aggregate Demand
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5
Select the statement below that corresponds to the business cycle.


The process of expansion and contraction of the GDP


Happens between expansions and recessions


Happens between recessions and expansions


Shows only the periods of economic decline

CONCEPT
 Business Cycles - Expansionary/Recessionary (NBER)
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6
Which statement below regarding the circular flow diagram is FALSE?


The circular flow diagram provides a big picture view of the economy.


The government influences the economy through taxes, subsidies and regulations.


The circular flow diagram shows how the main parties in the economy interact.


Firms purchase final goods and services from households.

CONCEPT
 Circular Flow Diagram
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7
Which of the following is true regarding recessions?


It refers to a moment when the economy is expanding rapidly.


We cannot see the effects of recession in industrial production.


It is not present in wholesale-retail sales.


It is a decline in economic activity.

CONCEPT
 Business Cycles - Expansionary/Recessionary (NBER)
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8
The consumer will bear more of the burden of a tax if demand is which of the following?


Inelastic


Perfectly elastic 


Unit elastic


Elastic

CONCEPT
 Tax/Subsidy
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9
If the base currency is 1 and the price currency is 3.4, which of the following is the
exchange rate?


 0.25


0.34


0.29


0.35

CONCEPT
 Foreign Exchange and Currency
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10
Which of the following terms is the sum of all final goods and services purchased in an
economy?


GDP growth


Resource cost/Income approach


Expenditure approach


Factor market

CONCEPT
 Economic Growth (GDP)
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11
Select the statement below that is true of ONLY capital account.


This includes traded goods, services and income.


 This is part of the balance of payments.


This is the sum of the balance of trade.


Investment and financing flows are part of this.

CONCEPT
 International Trade
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12
Which statement below about the exchange rate is FALSE? 


Exchange rates are subject to the economic volatility of the countries involved. 


Forms of notation for exchange rates can vary from country to country. 


An exchange rate is the value of one currency in terms of another. 


It is possible to predict precisely what the exchange rate between two countries will
be. 

CONCEPT
 Foreign Exchange and Currency
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13
Which statement below is true of price floors?


Rent control is an example of a price floor.


They lead to surpluses.


 They generate shortages.


If they are above the equilibrium, they are non-binding.

CONCEPT
 Surplus and Constraints
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14
Which of the following could cause a shift in the demand curve? 


A change in production capacity


A major shift in supply


A change in quantity


A change in income

CONCEPT
 Supply and Demand
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15
Which of the following is the most significant tool the government can use to reduce the
severity of business cycles? 


Debt reduction


Social security 


Spending


 Public goods

CONCEPT
 Role of the Government/Government Spending/Transfer Payments
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16
If the government would like to maintain the same growth trajectory for the economy,
which of the policy types below should it implement?


Monetary policy 


Neutral policy


Expansionary policy


Contractionary policy

CONCEPT
 Monetary Policy/Fiscal Policy
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17
Determine which statement below about economics is true.


Economics studies decision-making processes.


Macroeconomics studies the decisions of individual consumers and firms.


Economics predicts what the market will do in the future.


As a field of study, economics is pretty much the same around the world.

CONCEPT
 What is Economics?
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18
If a new car cost $1,250 in 1950 and is $30,000 in 2013, prices have increased by a factor
of which of the following?


20


24


48


12

CONCEPT
 Nominal GDP versus Real GDP
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19
Which definition below corresponds to economic indicators?


The movement of money in and out of a country or other entity

The movement of the market through periods of expansion and recession, peaks and
troughs


Data that indicates past, present and future activity


Exchange transactions that occur across nations

CONCEPT
 Why Study Macroeconomics?
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