The fundamental economic problem faced by all societies is: a. unemployment b. inequality c. poverty d. scarcity 2. "Capitalism" refers to: a.

the use of markets b. government ownership of capital goods c. private ownership of capital goods The fundamental economic problem faced by all societies is: a. unemployment b. inequality c. poverty d. scarcity 2. "Capitalism" refers to: a. the use of markets b. government ownership of capital goods c. private ownership of capital goods d. private ownership of homes & cars 3. There are three fundamental questions every society must answer. Which of the following is/are one of these questions? a. What goods and services are to be produced? b. How are the goods and services to be produced? c. Who will get the goods and services that are produced? d. All of the above 4. If you were working full-time now, you could earn $20,000 per year. Instead, you are working part-time while going to school. In your current part-time job, you earn $5,000 per year. At your school, the annual cost of tuition, books, and other fees is $2,000. The opportunity cost of completing your education is: a. $2,000 b. $5,000 c. $17,000 d. $20,000 e. $22,000 5. The bowed shape of the production possibilities curve illustrates: a. the law of increasing marginal cost b. that production is inefficient c. that production is unattainable d. the demand is relatively inelastic 6. You have taken this quiz and received a grade of 3 out of a possible 10 points (F).

You are allowed to take a second version of this quiz. If you score 7 or more, you can raise your score to a 7 (C). You will need to study for the second version. In making a rational decision as to whether or not to retake the test, you should a. always retake the quiz b. consider only the marginal benefits from of retaking the quiz (four extra points) c. consider only the marginal opportunity costs from taking the quiz (the time spent studying and taking the quiz) d. consider both the marginal benefits and the marginal opportunity costs of retaking the quiz 7. The law of demand states that: a. as the quantity demanded rises, the price rises b. as the price rises, the quantity demanded rises c. as the price rises, the quantity demanded falls d. as supply rises, the demand rises Economics 100 Quiz #1, Page 2 8. The price elasticity of demand is the: a. percentage change in quantity demanded divided by the percentage change in price b. percentage change in price divided by the percentage change in quantity demanded c. dollar change in quantity demanded divided by the dollar change in price d. percentage change in quantity demanded divided by the percentage change in quantity supplied 9. Community Colleges desired to increase revenues. They decided to raise fees paid by students with Bachelors degrees to $50 per unit because they believed this would result in greater revenues. But in reality, total revenues fell. Therefore, the demand for Community College courses by people with Bachelors degrees must have actually been: a. relatively inelastic b. unit elastic c. relatively elastic d. perfectly elastic 10. The demand for a product would be more inelastic: a. the greater is the time under consideration b. the greater is the number of substitutes available to buyers c. the less expensive is the product in relation to incomes d. all of the above Answers: D C D C A D C A C C Economics 100 Quiz #3 Friday, September 22, 2000

equilibrium 4. the demand has shifted to the right less than the supply has shifted to the right c. I only b. The agricultural price support program is an example of a. sellers providing goods for free that were formerly not free 6. companies c. If there is a price ceiling. sellers act in ____________ interest . a price ceiling b. consumers b. If there is a price floor. a. both I and II d. first-served b. workers d. provide incentives to sellers and buyers a. the demand has shifted to the left more than the supply has shifted to the left d. the demand has shifted to the right more than the supply has shifted to the right b. the government 7. rationing by first-come. provide information to sellers and buyers . II only c. black markets c. there will be a. surpluses c. surpluses c. but this leads to behaviors in ____________ interest. equilibrium 5. self. which of the following is NOT likely to occur? a. a price floor c. neither I nor II 8. gray markets d. equilibrium pricing 3. In a market system. a. the demand has shifted to the left less than the supply has shifted to the left 2. If there is a price ceiling. The goal of a pure market economy is to best meet the desires of a. In a pure market economy. II. which of the following is a function of the price? I. In the case of agriculture. shortages b. shortages b.1. self . there will be a.

marginal revenue equals marginal cost d. one seller of the product b. self. Which of the following is a characteristic of pure monopoly? a. the price is less than the marginal revenue c. the price is greater than the marginal revenue b. beyond some point: a. there is no relation d. The average physical product falls 10. marginal revenue equals average total cost b. spreading the average fixed cost c. specialization and division of labor b. In order to maximize profits. limited capital d. Why is the law of diminishing marginal returns true? a. self 9. society’s. In pure monopoly. society’s. a monopoly company will produce that quantity at which the: a. Total physical product begins to fall b. Quantity Price Total Cost 1 $100 $ 60 2 95 130 3 90 210 .b. price equals marginal revenue c. they are equal 3. The marginal physical product rises c. all factors being variable in the long-run Answers: B B B A D A C B C C Economics 100 MW Quiz #3 1. close substitute products d. The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor. society’s c. perfect information 2. society’s d. what is the relation between the price and the marginal revenue? a. total revenue equals total cost 4. The marginal physical product falls d. low barriers to entry c.

produce a lower quantity of the product c. Which of the following is true about the way by which SDG&E has been regulated by the PUC? a. charging different prices based on cost-of-service differences d. the market is very small d.4 85 300 5 80 400 This monopolist should produce: a. some degree of monopoly power b. All of the above 8. make a greater amount of economic profit d. a monopolist is more likely to: a. In order to practice price discrimination. 3 d. The profits of SDG&E are calculated as a percent of the value of the capital goods c. economies of scale b. an ability to prevent reselling d. Compared to the case of perfect competition. all of the above 10. a high proportion of the total cost is the cost of capital goods c. Which of the following is necessary for a natural monopoly? a. the section with the oldest people c. 4 e. 1 b. the section with the most inelastic demand . SDG&E has been allowed to earn very high economic profits b. 2 c. Which of the following best defines price discrimination? a. the price of electricity would also fall d. which section of the market is charged the higher price? a. which of the following is needed? a. In price discrimination. charging different prices on the basis of race b. When the demand for electricity would fall. the section with the richest people b. charging different prices for goods with different costs of production c. an ability to separate the market c. all of the above 7. 5 5. all of the above 6. selling a certain product of given quality and cost per unit at different prices to different buyers 9. charge a higher price b.

marginal physical product c. The demand for labor slopes down and to the right because of a. Workers Quantity Produced 1 15 2 28 3 39 4 48 5 55 6 60 This company is a profit-maximizing firm selling in a competitive product market and hiring in a competitive labor market. Assume that the current market price per damper is $50 and that the prevailing weekly salary per semi-skilled worker is $550. marginal revenus product d. wage 4. Fall 2002 1. economies of scale 5. The demand for labor will be more elastic if: . It uses semi-skilled labor to produce dampers used in office building ventilation systems. marginal revenue product b. The demand for labor is the same as the a. 4 d.d. the law of demand b. the section with the most elastic demand Answers: A A C C D D B D D C Economics 100 Quiz #4. 3 c. a. 2 b. the law of diminishing marginal returns d. marginal cost d. This company should employ ______ workers. marginal revenue 2. 6 3. 5 e. the iron law of wages c. marginal physical product c. Which of the following concepts represents the extra revenue a firm receives from the services of an additional unit of a factor of production? a. total revenue b.

If worker A earns more in wages than worker B. there is a short time under consideration c. the demand for the product is relatively inelastic e. Fall 2001 1. labor is a large percent of the total cost of production d. non-pecuniary skills d. Which skills are most likely to be paid for by the employer? a. Embodied skills c. pure discrimination b. the concentration ratio is: a. Skills that embodied in a person are called a. 50% b. specific skills Answers: C B A C C A B D A B Economics 100 Quiz #5. Experience skills 10. Worker A has more natural ability than worker B d. all of the above 7. 100% d. Worker A uses more capital per worker than worker B c.a. it could be because: a. specific skills c. The product made by worker A sells for a higher price than that made by worker B b. Physical capital d. General skills b. Educational skills 8. Specific skills c. statistical discrimination c. 8% . there are few substitutes for labor b. all of the above 6. All of the above 9. human capital d. Skills that can be transferred to other employers are called: a. each selling 2% of the total sales. “Treating an individual as typical of a group” is the definition of a. 2% € c. Human capital b. If there are 50 firms in a industry. general skills b.

2. 5. conglomerate Questions 3 through 10 involve the functions of the government in a world of laissez faire. The functions are the following: A. 3. bought Chrysler. 9. horizontal b. vertical c. The government requires people to have a smog control device in their cars. Promote or Maintain Competition C. choose the letter that best describes the function of government. Answers: D A B F D H C E G A Economics 100 Quiz 6. 7. The government subsidizes the building of new stadiums and arenas. When Daimler Benz. 8. The government provides anti-trust laws. The government makes laws that determine certain behaviors that a corporation must engage in and other behaviors that a corporation cannot engage in. Provide Merit Goods H. 4. Provide Information D. the merger was a. 6. Subsidize Positive Externalities (External Benefits) G. Reduce Negative Externalities (External Costs) through regulations or through taxes F. maker of the Mercedes. The government makes the beach free for everyone 10. The government requires that all gasoline stations post their prices in signs large enough to be seen by a reasonable person from the street. The government has a program of social security to provide a pension for the elderly. Redistribute Income on the Basis of Need For each of the following. The government provides for military defense. Provide Public Goods E. Fall 2002 . Create and Enforce the "Rules" B.

peak . A and B. progressive b. the sales tax 2. The largest source of tax revenue for the federal government is: a. Productivity is the United States grew very slowly between 1973 and 1996 c. the official unemployment rate is too high d. $400 c.300 7. 20% c. $1. “Full employment” occurs when there is no frictional unemployment 8. I paid $10. the state income tax c. $800 d. 40% 3. Which of the following taxes is regressive? a. Using the numbers in question 5. Immediately after a trough. In 1996. Which of the following statements is/are true? a. Business Investment Spending occurs when individuals buy stock in the stock market b. the property tax d. I paid $40. proportional 4. the social security tax c. Americans produced 20 units of A at a price of $20 and 30 units of B at a price of $30. The Nominal GDP for 2002 is: a. When my income was $100. Americans produced 10 units of A at a price of $10 and 20 units of B at a price of $20. $400 b. 30% d. When my income became $200.000.1. My marginal tax rate is: a. $500 c. $900 e.000 in taxes. the personal income tax b. Assume that there are two goods. $500 d. the Real GDP for 2002 is: a. $100 b. In 2002. The tax is question #2 is: a. $1300 6. the sales tax d.000 in taxes.000. the Medicare tax 5. the federal income tax b. Because of discouraged workers. $900 e. regressive c. we would expect to have a/an a. 10% b.

she spent looking for a job. cyclically unemployed d. Martha would be classified as a. For this. unemployed c. another trough 9. Define progressive tax Define regressive tax Define proportional tax 3. Define frictional unemployment Define cyclical unemployment Define structural unemployment Define “full employment” Economics 100 Quiz #7. He looked for a similar job for ten months before finding an accounting job at Sears. Fall 2002 . Define average tax rate Define marginal tax rate 2. he was a. frictionally unemployed b.b. 7. employed b. Define business investment spending 6. Briefly explain how the official unemployment rate is calculated. The rest of the week. recession c. she was paid $50. Define Nominal Gross Domestic Product (GDP) Define Real Gross Domestic Product (GDP) 5. seasonally unemployed c. During the month John was unemployed. structurally unemployed Answers: A C A C E C B C A D Economics 100 Makeup for Quiz 6 1. Define indexation 4. John lost his accounting job when Montgomery Wards closed its stores in San Diego. not in the labor force 10. Martha spent one day cleaning a house. Last week. recovery d.

5% d. save $1. National Income is therefore $10.000. Assume that there are only two goods: A and B In the base year. Assume that Potential Real GDP equals $10. National Income c. If the nominal interest rate is 5% and the inflation rate is 2%. and spend $7. 500 e. Quantity Price A 20 $ 5 B 25 $20 The Consumer Price Index (CPI) for the current year is: a.000 in taxes. Disposable Income is equal to: a. consumers will pay $2. 7% e.1. National Income Minus Taxes b. homeowners c. people with large debts to pay for their homes and cars d. Inflation makes everyone poorer b. National Income Minus Taxes d. workers with cost of living adjustments in their labor contracts b. Quantity Price A 10 $1 B 10 $4 In the current year. In order to avoid recessions and inflation (to have equilibrium). the government should have a: . 600 2. 3% c. 200 d. Real GDP c. 2 ½% 4. the real interest rate is: a. Inflation increases business investment spending d.000 on consumer goods. 2% b.000. 100 c. Business Investment spending is $2000.000. National Income Minus Taxes Plus Transfers 6. 50 b. For which of the following reasons might inflation cause Real GDP to grow slower than it otherwise would? a. Which of the following groups is most hurt by unexpected inflation? a. Inflation decreases savings in financial form 5. Of this. people with large retirement savings held in savings accounts 3. Inflation reduces the value of consumer debt c.

a. an increase in marginal tax rates lowers production c. medium of exchange b. If the government lowers taxes by $10 billion. done nothing b. budget deficit of $2000 7. when the Great Depression started. “Crowding out” means that a. spending on education c. savings deposits b. credit card c. unemployment benefits b. net interest 10. unit of accounting d. checkable deposits d. such as the Smoot-Hawley Tariff 8. the government should have: a. less than $10 billion c. the Real GDP will rise by a. According to Keynes. more than $10 billion b. enacted high tariffs. Which of the following is a component of M-1? a. gold . budget deficit of $1000 c. exactly $10 billion 9. a government budget deficit raises interest rates and causes investment spending to fall d. a government budget deficit raises American exports and lowers American imports Answers: D D B D D C C A A C Economics 100 Quiz 8 1. balanced budget b. Which of the following IS a function of money? a. had a large increase in government spending d. decreased the money supply c. a government budget deficit lowers interest rates and causes investment spending to rise b. store of value c. budget surplus of $1000 d. all of the above 2. defense spending d. Which of the following is an automatic stabilizer? a.

raise the discount rate c. water 7. its main policy-making body is the FDIC d. federal funds c. by how much will the money supply be increased? a. a savings account b. $10. it accepts deposits from the public and makes loans to businesses e. $1. $100 b. currency and reserves d. buy Treasury securities in the open market d. discounts b. reserves d. If the Federal Reserve wishes to increase the money supply. gold and silver b. currency and checkable deposits 8. it should: a. currency only c. its Board of Governors is elected by a vote of the people c.000 9. The monetary base is composed of: a. a home d. collateral 6. it is a system of 12 central banks b. small time deposits b. a 6 month CD c. all of the above 5. Which of the following is the most liquid? a. all of the above . raise the reserve requirement b. money market mutual funds c. checkable deposits 4.000 c. An IOU of the Federal Reserve Bank of San Francisco to Bank of America is called: a.000 d. stocks d. Which of the following is a NOT component of M-2? a. Which of the following is true about the Federal Reserve System (Fed)? a. $5. If the monetary base is increased by $1.3.000 and the reserve requirement is 10% (1/10).

$2. There are three fundamental questions every society must answer. $5. that production is unattainable d.000 d. Which of the following is/are one of these questions? a.000 e. that production is inefficient c. fall c.000 per year. you are working part-time while going to school.000 5. and other fees is $2.000 b. $17. Who will get the goods and services that are produced? d. you earn $5. always retake the quiz b. The opportunity cost of completing your education is: a. All of the above 4. You will need to study for the second version. How are the goods and services to be produced? c. What goods and services are to be produced? b. remain unchanged Answers: D C C A C A C D C B __________________ d. the law of increasing marginal cost b. The bowed shape of the production possibilities curve illustrates: a. In making a rational decision as to whether or not to retake the test. $22. At your school. private ownership of homes & cars 3. you could earn $20. You have taken this quiz and received a grade of 3 out of a possible 10 points (F). consider only the marginal benefits from of retaking the quiz (four extra points) c. If you were working full-time now. the demand is relatively inelastic 6. rise b. consider both the marginal benefits and the marginal opportunity costs of retaking the quiz . consider only the marginal opportunity costs from taking the quiz (the time spent studying and taking the quiz) d. books. you should a.10. the annual cost of tuition. You are allowed to take a second version of this quiz. $20.000 per year. An increase in the money supply will cause interest rates to a. you can raise your score to a 7 (C).000. Instead. In your current part-time job.000 c. If you score 7 or more.

the demand has shifted to the left more than the supply has shifted to the left d. unit elastic c. Therefore. percentage change in quantity demanded divided by the percentage change in quantity supplied 9. the demand has shifted to the right more than the supply has shifted to the right b. But in reality. total revenues fell. the price rises b. The law of demand states that: a. the less expensive is the product in relation to incomes d. as supply rises. the greater is the time under consideration b. 2000 1. the demand has shifted to the left less than the supply has shifted to the left 2. as the price rises. relatively elastic d. relatively inelastic b. The demand for a product would be more inelastic: a. percentage change in price divided by the percentage change in quantity demanded c. The price elasticity of demand is the: a. The agricultural price support program is an example of a. percentage change in quantity demanded divided by the percentage change in price b.7. as the price rises. a price ceiling . dollar change in quantity demanded divided by the dollar change in price d. as the quantity demanded rises. the demand has shifted to the right less than the supply has shifted to the right c. September 22. a. all of the above Answers: D C D C A D C A C C Economics 100 Quiz #3 Friday. the quantity demanded rises c. the demand rises Economics 100 Quiz #1. They decided to raise fees paid by students with Bachelors degrees to $50 per unit because they believed this would result in greater revenues. Page 2 8. In the case of agriculture. the quantity demanded falls d. the greater is the number of substitutes available to buyers c. perfectly elastic 10. Community Colleges desired to increase revenues. the demand for Community College courses by people with Bachelors degrees must have actually been: a.

II only c. self.b. there will be a. The marginal physical product rises c. society’s. first-served b. Total physical product begins to fall b. surpluses c. In a pure market economy. self. society’s c. self b. the government 7. self 9. both I and II d. which of the following is a function of the price? I. gray markets d. equilibrium pricing 3. The marginal physical product falls . a price floor c. equilibrium 4. companies c. The law of diminishing (marginal) returns states that as more of a variable factor is added to a certain amount of a fixed factor. which of the following is NOT likely to occur? a. surpluses c. In a market system. shortages b. provide incentives to sellers and buyers a. society’s. equilibrium 5. The goal of a pure market economy is to best meet the desires of a. II. rationing by first-come. If there is a price floor. sellers act in ____________ interest . there will be a. beyond some point: a. sellers providing goods for free that were formerly not free 6. society’s d. black markets c. workers d. If there is a price ceiling. shortages b. provide information to sellers and buyers . If there is a price ceiling. a. I only b. consumers b. neither I nor II 8. but this leads to behaviors in ____________ interest.

they are equal 3. Quantity Price Total Cost 1 $100 $ 60 2 95 130 3 90 210 4 85 300 5 80 400 This monopolist should produce: a. marginal revenue equals marginal cost d. close substitute products d. spreading the average fixed cost c. The average physical product falls 10. what is the relation between the price and the marginal revenue? a. low barriers to entry c. Why is the law of diminishing marginal returns true? a. 3 d. limited capital d. there is no relation d. specialization and division of labor b. all factors being variable in the long-run Answers: B B B A D A C B C C Economics 100 MW Quiz #3 1. total revenue equals total cost 4. 2 c. perfect information 2. 1 b. In order to maximize profits. 4 e. Which of the following is a characteristic of pure monopoly? a.d. price equals marginal revenue c. a monopoly company will produce that quantity at which the: a. 5 . marginal revenue equals average total cost b. the price is less than the marginal revenue c. In pure monopoly. the price is greater than the marginal revenue b. one seller of the product b.

Which of the following concepts represents the extra revenue a firm receives from the services of an additional unit of a factor of production? . all of the above 7. an ability to separate the market c. the price of electricity would also fall d. economies of scale b. all of the above 10. Compared to the case of perfect competition. all of the above 6. charge a higher price b. charging different prices on the basis of race b. the section with the richest people b. which of the following is needed? a. The profits of SDG&E are calculated as a percent of the value of the capital goods c. Fall 2002 1. Which of the following is necessary for a natural monopoly? a. the section with the most inelastic demand d. charging different prices based on cost-of-service differences d. some degree of monopoly power b. selling a certain product of given quality and cost per unit at different prices to different buyers 9. a monopolist is more likely to: a. charging different prices for goods with different costs of production c.5. make a greater amount of economic profit d. the section with the oldest people c. the section with the most elastic demand Answers: A A C C D D B D D C Economics 100 Quiz #4. SDG&E has been allowed to earn very high economic profits b. In order to practice price discrimination. which section of the market is charged the higher price? a. an ability to prevent reselling d. a high proportion of the total cost is the cost of capital goods c. Which of the following best defines price discrimination? a. the market is very small d. In price discrimination. Which of the following is true about the way by which SDG&E has been regulated by the PUC? a. When the demand for electricity would fall. produce a lower quantity of the product c. All of the above 8.

the demand for the product is relatively inelastic e.a. marginal revenue product b. the law of demand b. there are few substitutes for labor b. Assume that the current market price per damper is $50 and that the prevailing weekly salary per semi-skilled worker is $550. This company should employ ______ workers. The demand for labor slopes down and to the right because of a. 5 e. It uses semi-skilled labor to produce dampers used in office building ventilation systems. all of the above 6. 6 3. marginal revenus product d. wage 4. marginal revenue 2. there is a short time under consideration c. a. the iron law of wages c. specific skills . the law of diminishing marginal returns d. Skills that can be transferred to other employers are called: a. marginal physical product c. marginal cost d. The demand for labor will be more elastic if: a. 3 c. Workers Quantity Produced 1 15 2 28 3 39 4 48 5 55 6 60 This company is a profit-maximizing firm selling in a competitive product market and hiring in a competitive labor market. 2 b. economies of scale 5. The demand for labor is the same as the a. marginal physical product c. total revenue b. general skills b. 4 d. labor is a large percent of the total cost of production d.

Human capital b. Experience skills 10. Skills that embodied in a person are called a. human capital d. specific skills Answers: C B A C C A B D A B Economics 100 Quiz #5. statistical discrimination c. “Treating an individual as typical of a group” is the definition of a. it could be because: a. maker of the Mercedes. vertical c. When Daimler Benz. Specific skills c. 8% 2. Create and Enforce the "Rules" . the concentration ratio is: a. the merger was a. Embodied skills c. Fall 2001 1. horizontal b. The functions are the following: A. Educational skills 8. all of the above 7. Worker A uses more capital per worker than worker B c. each selling 2% of the total sales. 2% € c. The product made by worker A sells for a higher price than that made by worker B b. Which skills are most likely to be paid for by the employer? a. If worker A earns more in wages than worker B. 50% b. bought Chrysler. Physical capital d.c. conglomerate Questions 3 through 10 involve the functions of the government in a world of laissez faire. If there are 50 firms in a industry. pure discrimination b. non-pecuniary skills d. Worker A has more natural ability than worker B d. General skills b. All of the above 9. 100% d.

Promote or Maintain Competition C. the sales tax 2. Provide Merit Goods H. 7. The government subsidizes the building of new stadiums and arenas. The government requires people to have a smog control device in their cars. The government requires that all gasoline stations post their prices in signs large enough to be seen by a reasonable person from the street. The government makes the beach free for everyone 10. When my income was $100.B. 3. the property tax d. 9. Reduce Negative Externalities (External Costs) through regulations or through taxes F.000. I paid $40. I paid $10. 6. Answers: D A B F D H C E G A Economics 100 Quiz 6. 5.000. Redistribute Income on the Basis of Need For each of the following. the personal income tax b. 4. 10% .000 in taxes.000 in taxes. The government provides anti-trust laws. 8. Subsidize Positive Externalities (External Benefits) G. choose the letter that best describes the function of government. My marginal tax rate is: a. Provide Information D. Provide Public Goods E. The largest source of tax revenue for the federal government is: a. The government provides for military defense. Fall 2002 1. The government makes laws that determine certain behaviors that a corporation must engage in and other behaviors that a corporation cannot engage in. When my income became $200. the social security tax c. The government has a program of social security to provide a pension for the elderly.

“Full employment” occurs when there is no frictional unemployment 8. A and B. $1300 6.b. The Nominal GDP for 2002 is: a. $500 d. $900 e. the state income tax c. $500 c. not in the labor force . the sales tax d.300 7. $400 c. she spent looking for a job. progressive b. $900 e. proportional 4. she was paid $50. Immediately after a trough. For this. $400 b. the federal income tax b. recession c. recovery d. $800 d. employed b. the official unemployment rate is too high d. Martha would be classified as a. the Medicare tax 5. unemployed c. Americans produced 20 units of A at a price of $20 and 30 units of B at a price of $30. Last week. Using the numbers in question 5. Which of the following taxes is regressive? a. $1. peak b. The tax is question #2 is: a. In 1996. The rest of the week. Because of discouraged workers. regressive c. Assume that there are two goods. Business Investment Spending occurs when individuals buy stock in the stock market b. $100 b. the Real GDP for 2002 is: a. Americans produced 10 units of A at a price of $10 and 20 units of B at a price of $20. 20% c. In 2002. Productivity is the United States grew very slowly between 1973 and 1996 c. another trough 9. Which of the following statements is/are true? a. 30% d. we would expect to have a/an a. 40% 3. Martha spent one day cleaning a house.

10. frictionally unemployed b. 7. seasonally unemployed c. John lost his accounting job when Montgomery Wards closed its stores in San Diego. Define Nominal Gross Domestic Product (GDP) Define Real Gross Domestic Product (GDP) 5. 50 . cyclically unemployed d. he was a. During the month John was unemployed. He looked for a similar job for ten months before finding an accounting job at Sears. Briefly explain how the official unemployment rate is calculated. Define average tax rate Define marginal tax rate 2. Fall 2002 1. Quantity Price A 20 $ 5 B 25 $20 The Consumer Price Index (CPI) for the current year is: a. Define frictional unemployment Define cyclical unemployment Define structural unemployment Define “full employment” Economics 100 Quiz #7. structurally unemployed Answers: A C A C E C B C A D Economics 100 Makeup for Quiz 6 1. Define indexation 4. Quantity Price A 10 $1 B 10 $4 In the current year. Assume that there are only two goods: A and B In the base year. Define business investment spending 6. Define progressive tax Define regressive tax Define proportional tax 3.

Real GDP c. If the nominal interest rate is 5% and the inflation rate is 2%. the government should have: a. In order to avoid recessions and inflation (to have equilibrium). the government should have a: a. 100 c. Which of the following groups is most hurt by unexpected inflation? a.b. budget surplus of $1000 d. consumers will pay $2.000. Of this. Inflation decreases savings in financial form 5. workers with cost of living adjustments in their labor contracts b. when the Great Depression started. 200 d. National Income Minus Taxes Plus Transfers 6. 7% e. Inflation increases business investment spending d. 500 e. National Income c. balanced budget b. done nothing b. 2 ½% 4. Disposable Income is equal to: a.000 on consumer goods. Assume that Potential Real GDP equals $10. decreased the money supply c. National Income is therefore $10. budget deficit of $2000 7. 2% b. 3% c. 600 2. the real interest rate is: a. Inflation makes everyone poorer b.000. budget deficit of $1000 c. National Income Minus Taxes d. people with large retirement savings held in savings accounts 3. National Income Minus Taxes b. Inflation reduces the value of consumer debt c. save $1. Business Investment spending is $2000.000. homeowners c. According to Keynes. and spend $7.000 in taxes. had a large increase in government spending . For which of the following reasons might inflation cause Real GDP to grow slower than it otherwise would? a. people with large debts to pay for their homes and cars d. 5% d.

savings deposits b. Which of the following IS a function of money? a. a government budget deficit raises American exports and lowers American imports Answers: D D B D D C C A A C Economics 100 Quiz 8 1. net interest 10. a government budget deficit lowers interest rates and causes investment spending to rise b. less than $10 billion c.d. an increase in marginal tax rates lowers production c. credit card c. spending on education c. Which of the following is an automatic stabilizer? a. unit of accounting d. checkable deposits d. medium of exchange b. checkable deposits 4. it is a system of 12 central banks b. small time deposits b. Which of the following is a NOT component of M-2? a. Which of the following is a component of M-1? a. more than $10 billion b. stocks d. If the government lowers taxes by $10 billion. Which of the following is true about the Federal Reserve System (Fed)? a. exactly $10 billion 9. gold 3. the Real GDP will rise by a. all of the above 2. defense spending d. a government budget deficit raises interest rates and causes investment spending to fall d. unemployment benefits b. money market mutual funds c. its Board of Governors is elected by a vote of the people . enacted high tariffs. such as the Smoot-Hawley Tariff 8. “Crowding out” means that a. store of value c.

water 7.000 c.000 9. it should: a. buy Treasury securities in the open market d.000 d. Which of the following is the most liquid? a. gold and silver b. An IOU of the Federal Reserve Bank of San Francisco to Bank of America is called: a. currency and reserves d.000 and the reserve requirement is 10% (1/10). discounts b. all of the above 10. The monetary base is composed of: a. $10. remain unchanged Answers: D C C A C A C D C B __________________ . An increase in the money supply will cause interest rates to a. a savings account b. by how much will the money supply be increased? a. all of the above 5. its main policy-making body is the FDIC d. currency and checkable deposits 8. collateral 6. rise b. raise the reserve requirement b. $5. $1. it accepts deposits from the public and makes loans to businesses e. a home d. fall c. federal funds c. reserves d. If the monetary base is increased by $1.c. a 6 month CD c. raise the discount rate c. If the Federal Reserve wishes to increase the money supply. currency only c. $100 b.