ECON 212 Final Sample, Spring 2013

No SIM = © Inbox x / (© American University of x / ©) Look-Up Classes to Ad x / G) Inbox »/ MHECON2/ Th ECON212_km42_dr , C@ © moodie.aub.edu.|b. w ¥i= re See Home > My courses ® ECON212_km42_dm17 > General ® Practice Final Spring 2013 Quiz navigation Question 1 Which of the following instruments is used by the Federal Reserve to change the money supply? Wallallalsllell7 Not yet answered Marked out of 1 You are logged in as (Logout) Select one: Oda. the discount rate 8 |} 9 }[10})11)/12))13))14 ¥ Fiag question = 15}}16}/17]]18)|19)|20) (21 Ob. the required reserve ratio 22| 23] |24] 125] 26] 127] 128! Oc. open market operations Ou. all of the choices 29} /30}}31}/32]/33}/34)/35 36} |37}|38] [39] 40) |41|/42 43] [44] [45 Question 2 The presence of automatic stabilizers means that the federal deficit is than it otherwise would be in a Finish attempt yee recessionand than it otherwise would be in an expansion. inish attemp’ Marked out of 1 Select one: Y Flag question - Oa. larger; smaller Ob. smaller; larger _ Oc. smaller; smaller Ou. larger; larger Question 3 The aggregate demand curve slopes downward because at higher price level the purchasing power of consumers Rearetereerered| assets and consumption Marked out of t Select one: Y Flag question c- Oa. decreases; decreases my ; Ob. increases; increases Oc. decreases; increases Od. increases; decreases 12:06 AM » Inbox ¢ CS American University of ~») Look-Up Classes to Ad ~» Inbox Th ECON?’ Th ECON212_km42_dr , [S moodle.aub.edu.lb A Cy (Ob. increases; increases (Uc. decreases; increases Od. increases; decreases Question 4 Refer to Figure 13.3. This economy is most likely experiencing excess capacity at aggregate output levels: Not yet answered A AS Marked out of 1 ¥ Flag question Price level 600 800 1,200 Aggregate output ($ billion) Select one Oa. above $1,200 billion Ob. between $800 billion and $1,200 billion. Oc. between $600 billion and $800 billion. Od. below $600 billion. Question 5 price of pork price of corn Not yet answered Marked out of t $20 $20 ¥ Flag question $20 $30 Suppose that the basket of goods in the CPI consisted of 3 units of pork and 2 units of corn. What is the consumer 12:06 AM CS American University of >< 4 Look-Up Classes to Ad ~» Inbox x Th ECON?’ Th ECON212_km42_dr , moodle.aub.edu.|b Question 5 Not yet answered Marked out of 1 ¥ Flag question Question 6 Not yet answered Marked out of 1 Y Flag question Question 7 Not yet answered Marked out of 1 ¥ Fiag question price of pork price of corn $20 $20 $20 $30 Suppose that the basket of goods in the CPI consisted of 3 units of pork and 2 units of corn. What is the consumer price index for 2004 if the base year is 2003? Select one: Oa. 100 Ob. 105 Oc. 115 Oa. 120 If the unemployment rate is below the NAIRU, which of the following is most correct: Select one: Oa. The price level will increase Op. The change in the inflation rate will be negative Oc. The price level will accelerate Ou. The price level will decelerate The deviation of unemployment from its natural rate is: Select one: Oa. cyclical unemployment Ob. structural unemployment Oc. frictional unemployment Odd. none of the above No SIM = © Inbox x / (© American University of x / ©) Look-Up Classes to Ad x / G) Inbox »/ MHECON2/ Th ECON212_km42_dr , w ¥/= C@ © moodie.aub.edu.|b. Question 8 Not yet answered Marked out of 1 ¥ Flag question Question 9 Not yet answered Marked out of 1 Y Flag question Question 10 Not yet answered Marked out of 1 Y Flag question You are given the balance sheet of the Central Bank below. Assume that the banking system does not hold excess reserves, and the required reserve ratio is 20%. What is the money supply? Assets Liabilities & Net Worth Government Securities $200 Reserves $100 Currrency 100 Select one: Oa. 100 Ob. 200 Oc. 500 Oa. 600 In country A, all wage contracts are fully indexed to inflation. In country B, wages are not indexed to inflation but are negotiated in 3-year contracts. Select one: Oa. In country B, the AS curve is vertical. Ob. In country A, expansionary monetary policy has a bigger effect on output than in country B. Oc. In country B, expansionary monetary policy has a bigger effect on output than in country A. Oa. Wages in tend to be more sticky in country A than in country B. If firms don't know what the market-clearing wage is, they may simply set wages wrong. Which explanation of unemployment refers to this argument? Select one: Oa. The efficiency wage theory. Ob. Social, or implicit, contracts. Oc. The relative-wage explanation. Oa. Imperfect information. 12:06 AM 4 Inbox x CS American University of >< 3 Look-Up Classes to Ad > C Inbox x Th ECON?’ Th ECON212_km42_dr , Cc moodle.aub.edu.Ib w & = Question 11 Given below the equations for the demand and supply curves in the labor market: QD = 220 - 15W Not yet answered QS = 10W- 20 Marked out of 1 Where W is the wage in $/hour and Q is the number of workers. ¥ Flag question At a wage of $11/ hour, which of the following is correct: Select one: Oa. There is full-employment Ob. The unemployment rate is 39% Oc. The size of the labor force is 55 workers Oa. None of the above Question 12 Refer to Figure 13.7. Suppose the equilibrium price level is 110. An increase in wages and an increase in cea government spending will, for sure, increase: Marked out of 1 A AS Y Flag question 110+ ™ Price level AD 0 i 600 Aggregate output ($ billion) Select one: Oa. both the equilibrium output and the price level. Ob. the price level. Oc. equilibrium output. Odd. equilibrium output and decrease the price level. CS American University of > moodle.aub.edu.|b Question 13 Not yet answered Marked out of 1 ¥ Flag question Select one: Oa. A; C Ob. A; B Oc. B; A Od. B; D Question 14 Not yet answered Marked out of 1 Select one: ¥ Fiag question 12:06 AM ~») Look-Up Classes to Ad > ~» Inbox ~ 32 a e Interest rate (%) The theory of efficiency wages explains why Oa. itis efficient for firms to set wages at the equilibrium level. Th ECON2/ Th ECON212_km42_dr “ £ S Refer to Figure 11.2. An increase in income could be represented by a movement from Point __ 100 150 200 300 Money ($ million) Ob. it may be in the best interest of firms to offer wages that are above the equilibrium level. Oc. the most efficient way to pay workers is to pay them according to their skills. Od. None of the above Question 15 Not yet answered Marked out of 1 Cninnt nnn. ¥ to Point Given full-employment output = $2,800, equilibrium output = $2,500, and MPS = 0.25, which of the following changes would most likely bring the economy to a full-employment level of national output? 12:06 AM CS American University of >< 4 Look-Up Classes to Ad C Inbox x Th ECON?’ Th ECON212_km42_dr , moodle.aub.edu.|b Question 15 Not yet answered Marked out of 1 Y Flag question Question 16 Not yet answered Marked out of 1 ¥ Flag question Question 17 Not yet answered Marked out of 1 Y Flag question “A = w ¥i = Given full-employment output = $2,800, equilibrium output = $2,500, and MPS = 0.25, which of the following changes would most likely bring the economy to a full-employment level of national output? Select one: Oa. $300 decrease in taxes. Ob. $75 increase in government spending. Oc. $75 decrease in taxes. Oa. $300 increase in government spending. Thomas transfers $4,500 from his checking account to his savings account. This transaction will: Select one: Oa. not change M1 and decrease M2. Ob. decrease M1 and not change M2. Oc. increase both M1 and M2. Od. decrease both M1 and M2. Refer to Figure 13.2. Suppose the economy is at Point A. A decrease in money demand could cause a movement to Point: A ) Be 4 B Po e 2 1 a P AD AD° AD? ~ Aggregate output (Y) Select one: 12:06 AM = Inbox (@ American University of >) Look-Up Classes to Ad D Inbox Th ECON2/ Th ECON212_km42_d: , [S moodle.aub.edu.b w & = Cieeakice innit Refer to Figure 13.2. Suppose the economy is at Point A. A decrease in money demand could cause a movement to Point: Not yet answered Marked out of 1 A ¥ Flag question o > C A aL e » ® a 2 1 = AD a P AD° AD? > Aggregate output (Y) Select one: Oa. B. . D. Oc. c Ou. E Question 18 Refer to Figure 13.1. If the money demand curve shifts from Md1 to Md0: Not yet answered ra Marked out of 1 M* ¥ Flag question 2 ra y 8 i m6 on" — M} a Money M Select one: nlannad invactmant ull darrancea and annransata piitriit unll darroaca x / (@ American University of X / ©) Look-Up Classes to Ad / © Inbox * / TMECON2/ Th ECON212_km42_dr sv 8 Ww iy moodle.aub.edu.|b Question 18 Not yet answered Marked out of 1 ¥ Flag question Question 19 Not yet answered Marked out of 1 ¥ Flag question Question 20 Not yet answered Marked out of 1 Y Flag question Refer to Figure 13.1. If the money demand curve shifts from Md1 to Md0: rA& M* 2 £ 3 8 5 M? = i ~ 6 M; a Money M Select one: Oa. planned investment will decrease and aggregate output will decrease. Ob. planned investment will decrease and aggregate output will increase. Oc. planned investment will increase and aggregate output will decrease. Od. planned investment will increase and aggregate output will increase. The money supply has decreased from $1.5 trillion to $1 trillion. Which of the following could have caused this decrease? Select one: Oa. The Fed purchased government securities from the public. Ob. Consumers who were holding money within the banking system withdraw this money. Oc. The Fed decreased the discount rate. Oa. Commercial banks decide to hold fewer excess reserves. Balance Sheet of Springfield Bank Assets Liabilities Total reserves $500 Demand deposits $1000 12:07 AM ©) Inbox > / (@ American University of X / ©) Look-Up Classes to Ad / ©) Inbox »/ MHECON2/ Th ECON212_km42_dr a2 Cc moodle.aub.edu.|b w & = Question 20 Balance Sheet of Springfield Bank Not yet answered Assets Liabilities Marked out of 1 ¥ Flag question Total reserves $500 Demand deposits $1000 Loans $500 If Springfield Bank has excess reserves equal to $300, and then its customers write checks for $200, its excess reserves will fall to: Select one: Oa. $200 Ob. $100 Oc. $140 Od. $160 Question 21 A decrease in government purchases shifts the curve to the Not yet answered Marked out of f Select one: CD P Fag quacton da. aggregate demand; left Ob. aggregate supply; left Oc. aggregate demand; right Oa. aggregate supply; right Question 22 The level of output determined by the intersection of the short-run aggregate supply curve and the aggregate Not yet answered demand curve: Marked out of t Select one: Vr Sti - =} Oa. is always below full-employment output. Ob. is always above full-employment output. Oc. always corresponds to full-employment output.