ECO 561 Final Exam

Question no 1

The countercyclical discretionary fiscal policy calls for:​

Question no 2

Assume the reserve ratio is 25 percent and Federal Reserve Banks buy $4 million of U.S. securities from the public, which deposits this amount into checking accounts. As a result of these transactions, the supply of money is:​

Question no 3

Because the federal government typically provides disaster relief to farmers, many farmers do not buy crop insurance even though it is federally subsidized. This illustrates eco 561 final exam

Question no 4

Normal Profit is:

Question no 5

The simple circular flow model shows that:

Question no 6

Which of the following will generate a demand for country X’s currency in the foreign exchange market?​

Question no 7

Two major virtues of the market system are that it:

Question no 8

The two basic markets shown by the simple circular flow model are:

Question no 9

If the prices of all goods and services rose, but the quantity produced remained unchanged, what would happen to nominal and real GDP?​

Question no 10

The term “recession” describes a situation where:​

Question no 11

The business cycle depicts:

Question no 12

Suppose you have a limited money income and you are purchasing products A and B, whose prices happen to be the same. To maximize your utility, you should purchase A and B in such amounts that:

Question no 13

Buyers will opt out of markets in which:

Question no 14

If the Federal Reserve System buys government securities from commercial banks and the public:

Question no 15

As output increases, total variable cost:​

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Question no 16

Pure monopolists may obtain economic profits in the long run because

Question no 17

Macroeconomics approaches the study of economics from the viewpoint of:

Question no 18

Which of the following have substantially equivalent effects on a nation’s volume of exports and imports?​

Question no 19

Arnold is spending all her money income by buying bottles of soda and bags of pretzels in such amounts that the marginal utility of the last bottle is 60 utils and the marginal utility of the last bag is 30 utils. The prices of soda and pretzels are $.60 per bottle and $.40 per bag respectively. It can be concluded that:

Question no 20

A monopolistically competitive industry combines elements of both competition and monopoly. eco 561 final exam The monopoly element results from:

Question no 21

In the theory of comparative advantage, a good should be produced in that nation where:​

Question no 22

Why are economists concerned about inflation?

Question no 23

If an unintended increase in business inventories occurs at some level of GDP, then GDP:​

Question no 24

Which of the following statements best describes the 12 Federal Reserve Banks?​

Question no 25

In order for mutually beneficial trade to occur between two otherwise isolated nations:​

Question no 26

Contractionary fiscal policy is so named because it: eco 561 final exam

Question no 27

Research for industrially advanced countries indicates that:​

Question no 28

All else equal, a large decline in the real interest rate will shift the:​

Question no 29

The primary gain from international trade is:

Question no 30

The fact that international specialization and trade based on comparative advantage can increase world output is demonstrated by the reality that: