Econ Final A
Quiz by Matthew Hwrd
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- Q1
An increase in which of the following will most likely promote economic growth?
Taxes on investment
The price level
Human capital
Consumption of nondurable goods
Interest rates
45s - Q2
An economy is operating at a point inside its production possibilities curve (PPC). Which of the following will most likely cause the economy to move toward the current PPC in the short run?
A decrease in government spending
A decrease in inflation
An increase in human capital
An increase in employment
An increase in imports
45s - Q3
Which of the following will cause aggregate supply to increase in Country X?
An increase in personal income taxes
The discovery of low-cost alternative sources of energy
A decrease in labor productivity with no change in nominal wages
Depreciation of country X's currency on the foreign exchange market
An increase in the price level
45s - Q4
The graph above shows the production possibilities curve for Factory X and Factory Y. If Factory X uses the same amount of resources to produce skateboards and bikes as Factory Y uses, which of the following is true?
Factory X: 40 Bikes 60 Skateboards
Factory Y: 80 Bikes 60 Skateboards
Factory X has an absolute advantage in producing bikes.
Factory X has an absolute advantage in producing skateboards.
Factory X has a comparative advantage in producing skateboards.
Factory Y has a comparative advantage in producing skateboards.
Factory Y has an absolute advantage in producing skateboards.
30s - Q5
An increase in the price of oil, an important input to production, will result in which of the following in the short run?
A decrease in the price level
A decrease in short-run aggregate supply
A decrease in unemployment
An increase in real wages
An increase in aggregate demand
30s - Q6
An economy is currently operating at the full-employment level of output. Which of the following would result in a recessionary gap in the short run?
An increase in the costs of production
An improvement in the productivity of labor
An increase in money supply
A positive supply shock
A decrease in income tax rates
30s - Q7
Thailand and Malaysia are trading partners. If the price level in Thailand decreases relative to the price level in Malaysia, what will happen to Thailand's exports to Malaysia and Thailand's aggregate demand?
Thailand's Exports: Increase
Thailand's AD: Increase
N/A
30s - Q8
Country X produces only apples and bananas. The following table shows prices and quantities of both products in two years.
Year 1 Apples: $1 and 100Year 1 Bananas: $2 and 50
Year 2 Apples: $2 and 80Year 2 Bananas: $2 and 60
Assuming year 1 is the base year, what is the nominal and real gross domestic product (GDP) for year 2?
Nominal GDP: $280
Real GDP $200
N/A
30s - Q9
Which of the following is a fiscal policy action aimed at reducing unemployment?
Decreasing income taxes
30s - Q10
Increases in human capital can be achieved by which of the following?
Improving the quality of job-training programs
30s - Q11
If the marginal propensity to save is 0.250.25, a $15 billion increase in government spending will lead to an increase in national income by a maximum of
$60 billion
30s - Q12
Assume the economy is currently in long-run equilibrium. An increase in the money supply will affect unemployment in the short run and in the long run in which of the following ways?
Short Run: Falls below the NRU
Long Run: Rises back to NRU
N/A
30s - Q13
The term "value added" for a firm is best defined as which of the following?
The firm's sales minus the cost of inputs purchased from other firms.
30s - Q14
An increase in a country's current account surplus will result in which of the following in the short run?
An increase in the country's net financial capital outflows
30s - Q15
Using 2010 as the base year, the gross domestic product (GDP) deflator in 2011 was 97. Which of the following must be true?
The inflation rate in 2011 was negative
30s