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Econ 202 Final Exam Questions with Correct Answer2
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Econ 202 Final Exam Questions with Correct Answer2
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Econ 202 Final Exam Questions with Correct AnswersWhat does the real wage equal if the nominal wage equals $40 and the
consumer price index equals 200? Correct Answer-$20
The official unemployment rate typically... Correct Answer-increases for
a period after the recession ends, because discouraged workers enter the
labor force looking for jobs, and firms still have excess capacity and
may continue to lay workers off
The key idea of the aggregate expenditure model is that in any particular
year, the level ofr GDP is determined mainly by Correct Answer-the
level of aggregate expenditure
Deflation can have effects of the economy because Correct Answer-
consumers may delay spending waiting for prices to fall further, and the
higher real interest rate increase the burden on borrowers
The short term unemployment arising from the process of matching
workers with jobs is called Correct Answer-frictional unemployment
The consumer price index implicity assumes that the demand curves by
consumers for the goods and services in the representative market basket
are Correct Answer-vertical
Inflation usually ________ with an expansion and ________ with a
recession Correct Answer-increases;decreases
,If the consumer function is horizontal then the marginal propensity to
consume equals Correct Answer-0
Which of the following is the sequence of the business cycle Correct
Answer-troug, expansion, peak, recession
Which of the following statements is/are TRUE
(I) Nominal GDP is GDP in a given year valued in the prices of that
given year
(II) For and economy, the value of the total production equals the value
of total income Correct Answer-Both (I) and (II)
Which of the following causes the enemployment rate as measured by
the Bureau of Labor Statistics to understate the true extent of joblessness
Correct Answer-discouraged workers
Potential GDP is defined as Correct Answer-the level of GDP attained
when all firms are producing at capacity.
If an economy is growing at a rate of 7% per year, approximately how
long will it take the economy to double in size Correct Answer-10 Years
The aggregate expenditure model focuses on the relationship between
_____ and _____ in the short run assuming ____ is constant Correct
Answer-total spending; real GDP; the price level
, Which of the following increases labor productivity Correct Answer-
inventions of new machinery, equipment and software
When an unemployment person drops out of the labor force, the
unemployment rate Correct Answer-decreases
When an unemployed person drops out of the labor force, the
employment-population ratio Correct Answer-does not change
What price index does the Federal Reserve use for its average inflation
target Correct Answer-personal consumption expenditure price index
(PCE)
Gross domestic production (GDP) ____ total production in the economy
because GDP_____ Correct Answer-understates; omits household
production and the underground economy
The quantity of goods and services that can be produced by one worker
or by one hour of work is referred to as Correct Answer-labor
productivity
Suppose you lend $1000 at an interest rate of 5%. If the expected real
interest rate is at 2% the the rate of inflation over the upcoming year that
would be most beneficial to you as a LENDER would be a rate of
inflation Correct Answer-less than 3%
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