Econ 104 Final EXAM 200+ QUESTIONS & ANSWERS / ADVANCED PHARMACOLOGY FOR CARE OF FAMILY|AGRADE

Econ 104 Final EXAM 200+
QUESTIONS & ANSWERS / ADVANCED
PHARMACOLOGY FOR CARE OF
FAMILY|AGRADE
A college must decide if it wants to offer more Internet-based classes. This decision
involves answering the economic question of "what to produce." - ANSWER//True

One desirable outcome of a market economy is that it leads to a more equitable
distribution of income. - ANSWER//False

An economic model is a simplified version of reality used to analyze real-world
economic situations. - ANSWER//True

The decisions Apple makes in determining production levels for its iPhone is an
example of a macroeconomics topic. - ANSWER//False

Economic resources are also called factors of production. - ANSWER//true

A curved line has slope values that change at every point. - ANSWER//true

A straight line has a slope of zero. - ANSWER//false

If a country is producing efficiently and is on the production possibilities frontier, the only
way to produce more of one good is to produce less of the other. - ANSWER//false

If a country produces only two goods, then it is not possible to have a comparative
advantage in the production of both those goods. - ANSWER//true

Any output combination outside a production possibility frontier is associated with
unused or underutilized resources. - ANSWER//false

An increase in the labor force shifts the production possibility frontier inwards over time.
- ANSWER//false

,If Sanjaya can shuck more oysters in one hour than Tatiana, then Sanjaya has a
comparative advantage in shucking oysters. - ANSWER//false

The basis for trade is comparative advantage, not absolute advantage. -
ANSWER//True

In a two-good, two country world, if one country has an absolute advantage in the
production of both goods, it cannot benefit by trading with the other country. -
ANSWER//false

For a person to have a comparative advantage in producing a product, she must be
able to produce that product at a lower opportunity cost than her competitors. -
ANSWER//true

It is possible to have a comparative advantage in producing a good or service without
having an absolute advantage. - ANSWER//true

An increase in the unemployment rate may be represented as a movement from a point
on the production possibilities frontier to a point inside the frontier. - ANSWER//true

The full-employment rate of unemployment is zero. - ANSWER//false

In general, economists rely more heavily on the establishment survey rather than the
household survey to evaluate the state of the labor market. - ANSWER//true

If Ethel sold her 2003 Ford Focus for $2,250 in 2017, the sale of her car contributed
$2,250 to 2017 GDP. - ANSWER//false

If an increase in residential burglaries results in households spending more money on
security systems, GDP will rise. - ANSWER//true

Consumption is negatively related to stock market wealth but positively related to taxes
and tax rates. - ANSWER//false

If aggregate expenditures rise unexpectedly, then inventories will also rise
unexpectedly. - ANSWER//false

Services are the most interest rate sensitive component of consumption. -
ANSWER//false

Investment is the least cyclical component of aggregate expenditures. - ANSWER//true

The 'job-loss' recovery occurred following the 2001 recession. - ANSWER//true

, Positive real interest rates imply that if you save today, you can purchase a smaller
basket of goods and services in the future, relative to the basket you could have
consumed today. - ANSWER//false

The higher the marginal propensity to consume the more powerful tax policy is to
influencing consumption. - ANSWER//true

According to the results of the estimated consumption function, consumption is less
sensitive to changes in stock market wealth relative to changes in real estate wealth. -
ANSWER//true

The sensitivity parameter in the consumption function that measures how sensitive
consumption is to changes in consumer confidence is referred to as the marginal
propensity to consume. - ANSWER//false

In a consumption function with income (Y) on the horizontal axis and consumption (C)
on the vertical axis, a fall in the real rate of interest (all else constant) will cause a shift
upward of the consumption function. - ANSWER//true

In a consumption function with income (Y) on the horizontal axis and consumption (C)
on the vertical axis, a rise in the price level (all else constant) will cause a shift upward
of the consumption function. - ANSWER//false

A increase in tao, the effective tax rate on capital will result in the investment demand
function shifting to the right. - ANSWER//false

The slope of the investment demand function indicates how sensitive investment is to
changes in real interest rates. The 'steeper' the investment demand function, the less
sensitive investment is to changes in the real rate of interest, all else constant. -
ANSWER//True

A rise in exports, all else constant, will increase net exports. - ANSWER//true

If the US is growing faster than the rest of the world, then all else constant, the trade
deficit will widen (get more negative assuming we were running a trade deficit to begin
with). - ANSWER//true

If the inflation rate rises in China so that it exceeds that of the US, then net exports for
the US should increase, all else constant. - ANSWER//true

If the exchange rate between the US dollar and Japanese yen changes from $1 = 100
yen to $1 = 120 yen, then US exports to Japan will become more expensive to
Japanese importers. - ANSWER//true

We argued that cash flow (CF) increased during the Great Recession and thus, had a
positive effect on investment. - ANSWER//false