ECON 212 Midterm, Fall 2010

ECON212_ ur00_se0 : Midterm Fall 2010/2011 moodle.aub.edu.|b/mod/quiz/review.php ? Oo OO + Marks: nN Marks Marks: b Marks wu Marks Marks: size o MPC increases, the value of the balanced-budget multiplier . increases o b. decreases c. remains constant d. could either increase or decrease Correct Marks for this submission: If the MPC is .9, and the tax rate is .1, then the tax multiplier is Choos Correct Marks for this submission: 1/1 When unanticipated inflation occurs regularly, the degree of risk associated with im a. increases. decreases e remains stable Because investment is autonomous n d. could Fise or fall depending upon t exchange rate Correct Marks for this "submission? 1/1 it rate of 5% on his sav If A. Jackson is paid an inte’ ears is swer b. . d. 35% Correct Marks for this submissic The average amount of goods and services produced from each hour of a wor! Choose one per capita GDP o wer b. per capita GNP c. productivity d. human capital n the.economy t rate A. Jackson er's time is called Correct Marks for this submissic 1/1 GDP $1 Income Earned by Citizens Abroad $5 Income eianers Earn here $15 ECON212_ur00_se02: Midterm Fall 2010/2011 EEE, (5 CQ = | moodle.aub.edu.lb/mod/quiz/review.php?... @ 6 GDP Marks: 1 Income Earned by Citizens Abroad Income Foreigners Earn here Depreciation Indirect Business Taxes Business Subsidies Statistical Discrepancy Retained Earnings Corporate Income Taxes Social Insurance Contributions Interest Paid to Households by Government Transfer Payments to Households from Government Personal Taxes Non-tax payments to Government NNP for this economy is Choose one a. $100 x answer. © b. $96 v c. $90 x d. $88 x Correct Marks for this submission: 1/1. 7 The tax multiplier is the Marks: 1 Choose one ") a. change in output Givided by the change in saving times the MPC. x answer. b. change in output divided by the change in consumption times the MPS. c. rise in equilibrium GDP resulting from @ One dollar rise in autonomous taxes. x da. change in output divided by the change in consumption times the MPC. "y Incorrect Marks for this*Submission: 0/1 8 opie 24 Refer to Figure 8.1. An increase in the amount of consumption this household makes when this household's income is zero jarks: saving > € $ 0 8 1,000 Income 200 Figure $4 Choose one a. makes the consumption function steeper. x answer. b. makes the saving function flatter. » c. shifts the consumption function downward. » © d. shifts the saving function downward. ¥ Correct Marks for this submission: 1/1. ECON212_ ur00_se02: Midterm Fall 2010/2011 (> CO * | moodle.aub.edu.lb/mod/quiz/review.php?... G Marks for this submission: 1/1 9 Refer to the Table 2-1. What is the level of Gross Domestic Product? Marks: 1 Table 2-1 Item Billions of Dollars a. Personal Consumption 1970 b. Capital Consumption Allowance 360 ¢. Personal Interest Payments 60 d. Indirect Business Taxes 260 e. Corporate Dividends 80 f. Federal Purchases of Goods and Services 300 g. Inventory Change 40 h. Social Security Contributions 220 i. Nonresidential Fixed Investment 240 j. Exports 300 k. Personal Taxes 400 I. After-tax Corporate Profits 180 m. Government Transfer and Interest Payments 440 n. Corporate Income Taxes oO 0. Imports 280 p. State and Local Purchases of Goods and Services 340 q. Residential Fixed Investment 140 Cho one a..2690 answer. b. 3050 ¥ c. 2430 3010, x Incorrect Marks for this submission: 0/1 1 In the simple circular flow model containing just households and business firms, the entire product flows to n e je for manke:1 xchange fo Choos answ one a. business firms, labor services b. business firms, wages c. households, consumer expenditures _/ d. households, labor services Incorrect Marks for this submission: 0/1 11 A company produced 8 dishwasher machines in 2005. The company sold 6 in 2005 and added 2 to its inventories. The Marks: 1 market value of the dishwasher machines in 2005 was $200 per unit. What is the value of this company’s output that will = be included in t 05 GDP? Choose one a. $1,600. ¥ answe b. $400. ¢. $2,000. d. $1,400. Correct Marks for this submission: 1/1 12 Retained earnings are the part of income that Marks: 1 Choose one a. households retain after paying taxes answe b. businesses retain after paying taxes. ECON212_ ur00_se02: Midterm Fall 2010/2011 fo CO + | moodle.aub.edu.lb/mod/quiz/review.php? 12 Retained earnings are the part of income that @. households retain after paying taxes. b. businesses retain after paying taxes. c. corporations pay to thei aners in the form of dividends. d. corporations do not pay to their owners in the form of dividends. Incorrect Marks for this submission: 0/1 13 If the MPS is .2, t 5,m 2, the government tax multiplier is Marks: 1 a.4 b. 1.11 ce Lo Incorrect Marks for this submission: 0/1 14 ey of 200,000:people.finds'76,300 “employed,” 6,640 "unem yed,” and the remaining 117,060 “not in the labor Marks: 1 What is the unemployment rate derived from these numbers? one a. 8.7 percent b. 3.3 percent c. 8.0 percent y d. 5.7 percent Correct Marks for this.submission»1/4 iS Refer to Figure A $10 million increase in planned Marks: 1 investment cau £ 27 x5 gs 1,000 25 60 ee 3 270 < 4s° > A 1,000 1,500 Aggregate output ($ millions) Figure $11 Choose one a. $1,016.7 million. answer b. $1,010 million ¢. $1,025.0 million. d. $1,215.6 million Correct Marks for this submission: 1/1 ECON212_ ur00_se02: Midterm Fall 2010/2011 (> CO * | moodle.aub.edu.lb/mod/quiz/review.php?... C Correct Marks for this submission: 1/1 16 [price of pork iprice of corn Marks: 1 00 }s20 |$20 $20 $31 a. 33.3 percent b. 25 percent c. 20 percent ¥ d. 15 percent Correct Marks for this submission: 1/1 17 The condition in circular-flow models whereby firms purchase all the goods not purchased by households is that Choi answer a. inventory investment is zero. b. saving is zero. c. fixed investment is zero. d. consumption equals investment. ©. investment equalssaving. Correct Marks for this submission: 1/1 18 Mi 1 Refer to Figure 8.10. The equation for the aggregate expenditure function AEO is Marks 2 B & AE, °F é a v= ZE Se 50 ¢ < } id as 200 Aggregate output ($ millions) Figure 5.10 a. AEO = SO + .6Y b. AEO = 80 + .6Y. c. AEO = 50 + .75Y. ¥ d. AEO = 50 + .4¥ Correct Marks for this submission: 1/1 19 If C + .8Y and I = 50, then the equilibrium level of income is Marks: 1 Choose one a. 600 ECON212_ ur00_se02: Midterm Fall 2010/2011 (> CO *# | moodle.aub.edu.lb/mod/quiz/review.php?... C 20 Marks N N Marks: N w Marks c. AEO = 50 + .75Y. ¥ d. AEO = SO + .4Y. Correct Marks for this submission: 1/1 If C = 100 + .8¥ and I = SO, then the equilibrium level of inco s a. 600. answer. b. 375. c. 187.5 d. 750. ¥ Correct Marks for this submission: 1/1 Which of the following is included in U.S. GDP? Cc one a. U.S. exports of goods and services / b. Social Security payments Goethe sale of used goods d. None of the answers are Correct. Correct Marks for this submission: 1/1 A farmer sells raw milk for 50 to a dairy, who Sells chee made from it for $1.50 to a grocery wholesaler, who sells it for $1.90 to a Supermarket, ells it to the final consumer for $2.49. These transactio the GDP by a. $0.50 + $1.00 + $0.40 + $0.29 = $2.19. y b. $0.50 + $1.00 + $1.90 + $2.19 = $5.59 n 2. uw =] + $1.00 @ $1.50 d. $2.19 - $1.50 = $0.69. $2.19 - $0.50 = $1.69, Correct Marks for this submission: 1/1 Taxes are reduced by $50 billion and income i eases by $200 billion. The value of the tax multiplier is Cho one a.-4 ¥ answer. b. -20 c. -10 d. -5 Correct Marks for this submission: 1/1 e Table 2-1 What is the le of Disposable Personal Income? Table 2-1 Item Billions of Dollars a. Personal Consumption 1970 b. Capital Consumption Allowance 360 c. Personal Interest Payments 60 ECON212_ ur00_se02: Midterm Fall 2010/2011 (> CO * | moodle.aub.edu.lb/mod/quiz/review.php?... G Correct Marks for this submission: 1/1 23 M 1 Refer to the Table 2-1 What is the level of Disposable Personal Income? Marks: Table 2-1 Item Billions of Dollars a. Personal Consumption 1970 b. Capital Consumpt Allowance 360 c. Personal Interest Payments 60 d. Indirect Business Taxes 260 e. Corporate Dividends 80 Federal Purchases of Goods and Services 300 g Inventory Change 40 h. Social Security Contributions 220 i. Nonresidential Fixed Investment 240 j. Exports 300 k. Personal Taxes 400 ! After-tax Corporate Profits 180 m. Government Transfer and Interest Payments 440 n. Corporate Income Taxes 0 0. Imports 280 p. State and Local Purchases of Goods and Services 40 gq. Residential Fixed Investment 140 Cho a. 2520 | piag00 x ¢. 2200 d. 2120 ¥ Incorrect Marks for this.submission:.0/1 24 M 1 Refer to Figure 8.8. Leakages are greater than injections ab.an,aggregate output level of Marks: g 4 £ AE "3 — 225 He & 5 200 sé ge 175 &2@ 150 8 45 a 100 200 300 Aggregate output ($ millions) Figure 8.8 Choose one a. Cannot be determined from the figure, we need the saving function. b. $100 million ¢. $200 million. d. $300 million. ¥ Incorrect Marks for this submission: 0/1 25 Marke: 1 ECON212_ur00_se02: Midterm Fall 2010/2011 EEE, (5 CQ = | moodle.aub.edu.lb/mod/quiz/review.php?... @ OT. Ss00 Timon. 7 Incorrect Marks for this submission: 0/1 25 GDP Marks: 1 Income Earned by Citizens Abroad Income Foreigners Earn here Depreciation Indirect Business Taxes Business Subsidies Statistical Discrepancy Retained Earnings Corporate Income Taxes Social Insurance Contributions Interest Paid to Households by Government Transfer Payments to Households from Government Personal Taxes Non-tax payments to Government Personal Income for this economy is Choose one a. $91 ¥ answer. B.S$8i x ec. $80 x d, $51 x Correct Marks for this submission: 1/1. 26 Bill borrows $100 from Jack. Jack wants towfmake a 5% real retmmGn his money, so they both agree on @/5% interest rate t "t % i Marks: 1 paid next year. Both don't anticipate the 3% inflation next year. In this case, Choose one a. Jack is better off. x answer. b. Bill will pay $8 a year from now on. |x c. Bill is better off. ¥ d. Jack will receive more than 5% of real rate of return a year from now. Incorrect Marks for this submission: 0/1. 27 An increase in autonomous taxes Marks: 1 Choose one a. increases autonomous planned spending by an equal amount. * answer. © b. decreases autonomous planned spending by an equal amount. c. increases consumption by that amount times the marginal propensity to consume. x d. decreases saving by that amount times the marginal propensity to save. ¥ Incorrect Marks for this submission: 0/1. - GDP Marks: 1 Income Earned by Citizens Abroad Income Foreigners Earn here Depreciation Indirect Business Taxes Business Subsidies ECON212_ ur00_se02: Midterm Fall 2010/2011 (> CO * | moodle.aub.edu.lb/mod/quiz/review.php?... G 28 GDP Marks: 1 Income Earned by Citizens Abroad Income Foreigners Earn here Depreciation Indirect Business Taxes Business Subsidies Statistical Discrepancy Retained Earnings Corporate Income Taxes Social Insurance Contributions Interest Paid to Households by Government Transfer Payments to Households from Government Personal Taxes Non-tax payments to Government National income for this economy is Choose one a. $96 answe b. $92 ¥ c. $90 d. $88 Incorrect Marks for this submission: 0/1 29 Assuming that there are NO income taxes, if both autonomous taxes, and emment expenditures were to rise by $100 Marks: 1 million, we would expect equilibrium GOP te Choose one a. rise by $100emillion. ¥ answer b. rise, but by a multiple of $100 million. c. rise by less than $100 million d. remain unaffected because leakag@S\have changed by the same amount. Correct Marks for this submission: 1/1 30 If Ss 200 + 0.2Y and I = 100, then the equilibrium level of inco Marks: 1 Choose one a. 3,000 answer b. 1,500. ¥ c. 4,000 d. 1,200. Correct Marks for this submission: 1/1. 31 The APS is always than the MPS. Marks: 1 Choose one a. smaller ¥ answer b. equal c. bigger x d. All of the choices are possible Correct Marks for this submission: 1/1 ECON212_ ur00_se02: Midterm Fall 2010/2011 (> CO * | moodle.aub.edu.lb/mod/quiz/review.php?... G 31 The APS is always than the MPS. Marks: 1 Choose one a. smaller ansv b. equal c. bigger d. All of the choices are possible x Correct Marks for this submission: 1/1 If government spending is increased by $400, taxes are reduced by $400, and the MPS is .5, equilibrium output will change c Choose one a. $400 x ansv b. $800 x c. $1,200 ¥ d. -$400 Correct Marks for this submission: 1/1 33 Assume thatthe level of autonomous consumption in.an economy equals 400,.the level of planned.investment = 200, G Marks: 1 0,T = 0, NX = 0, and the marginal propensity to consume is 0.6. Refer to the information above. If the level of production . in the economy equals 3000, the amount of saving equals and the level of unintended inventory investment equals Choose one a. 800, 600 ¥ answer b. 400, 400 c. 800, 800 d. 800, 2400 e. 1200, 1000 Incorrect Marks for this submission: 0/1. 34 Frictional unemployment arises because Marks: 1 a. there is no job for those who seek employment. b. there is a job for those who seek employment, but they haven't found it yet. ¥ c. those who seek employment are not qualified to perform the jobs they are looking for. d. the economy is in a recession. Correct Marks for this submission: 1/1 35 Assume that the economy is initially at its equilibrium level of GDP. at will happen to the equilibrium level of GDP if Marks: 1 _Planned investment decreases by 20, government spending increases by 30, and taxes increase by 10? a. GDP will decrease by 60 b. GDP will decrease by 10 . there will be no change in GDP n d. GDP will increase by 10 ¥ Correct Marks for this submission: 1/1