ECON 2120 Exam Questions & Answers
QUESTIONS & ANSWERS
C. Borrowers
In financial markets, which group best represents the demand side of the market?
A. Stock markets
B. Banks
C. Borrowers
D. Savers
D. Paying tuition for a collage education.
Which of the following is NOT considered a saving?
A. Making a deposit in a savings account at the bank.
B. Buying a share of stock in a computer company.
C. Buying a corporate bond.
D. Paying tuition for a collage education.
C. a low savings rate
The consumption-smoothing theory implies that a country whose people have a very low life
expectancy has:
A. low consumption
B. high investment
C. a low savings rate
D. a high borrowing rate
B. People are enticed to forgo consumption when interest rates are higher.
,The supply of savings is positively sloped because:
A. Firms borrow more when interest rates are low.
B. People are enticed to forgo consumption when interest rates are higher.
C. When people have more incomes they save more.
D. Higher interest rates cause people to save less.
A. Decrease.
Higher interest rates typically ________ borrowing, ceteris paribus.
A. Decrease.
B. Maintain.
C. Increase.
D. Indeterminately change.
D. Consumers become less patient.
Which of the following reasons could cause the supply curve for loanable funds to shift to the
left?
A. The economy is expected to go into a recession.
B. An existing investment tax credit is abolished.
C. The government ceases taxing interest earnings.
D. Consumers become less patient.
C. A man who was laid off from an auto manufacturing plant in Detroit.
Which of the following individuals can be counted as unemployed?
A. A woman who works only part time.
B. A temp worker, who is currently responding to job advertisements from the newspaper.
, C. A man who was laid off from an auto manufacturing plant in Detroit.
D. A husband who stays at home to raise his two children.
C. Understated.
The presence of discouraged workers causes the measured unemployment rate to be:
A. Correctly stated.
B. Overstated.
C. Understated.
D. Either overstated, understated, or correctly stated.
C. Scarcity of information.
What is one of the causes of frictional unemployment?
A. Uneducated workforce.
B. Willingness to take lower level jobs.
C. Scarcity of information.
D. Overabundance of job vacancies.
B. Structural Unemployment.
The shift toward more of a service economy and less of a manufacturing economy in the United
States has caused an increase in:
A. Frictional Unemployment.
B. Structural Unemployment.
C. Cyclical Unemployment.
D. Seasonal Unemployment.
QUESTIONS & ANSWERS
C. Borrowers
In financial markets, which group best represents the demand side of the market?
A. Stock markets
B. Banks
C. Borrowers
D. Savers
D. Paying tuition for a collage education.
Which of the following is NOT considered a saving?
A. Making a deposit in a savings account at the bank.
B. Buying a share of stock in a computer company.
C. Buying a corporate bond.
D. Paying tuition for a collage education.
C. a low savings rate
The consumption-smoothing theory implies that a country whose people have a very low life
expectancy has:
A. low consumption
B. high investment
C. a low savings rate
D. a high borrowing rate
B. People are enticed to forgo consumption when interest rates are higher.
,The supply of savings is positively sloped because:
A. Firms borrow more when interest rates are low.
B. People are enticed to forgo consumption when interest rates are higher.
C. When people have more incomes they save more.
D. Higher interest rates cause people to save less.
A. Decrease.
Higher interest rates typically ________ borrowing, ceteris paribus.
A. Decrease.
B. Maintain.
C. Increase.
D. Indeterminately change.
D. Consumers become less patient.
Which of the following reasons could cause the supply curve for loanable funds to shift to the
left?
A. The economy is expected to go into a recession.
B. An existing investment tax credit is abolished.
C. The government ceases taxing interest earnings.
D. Consumers become less patient.
C. A man who was laid off from an auto manufacturing plant in Detroit.
Which of the following individuals can be counted as unemployed?
A. A woman who works only part time.
B. A temp worker, who is currently responding to job advertisements from the newspaper.
, C. A man who was laid off from an auto manufacturing plant in Detroit.
D. A husband who stays at home to raise his two children.
C. Understated.
The presence of discouraged workers causes the measured unemployment rate to be:
A. Correctly stated.
B. Overstated.
C. Understated.
D. Either overstated, understated, or correctly stated.
C. Scarcity of information.
What is one of the causes of frictional unemployment?
A. Uneducated workforce.
B. Willingness to take lower level jobs.
C. Scarcity of information.
D. Overabundance of job vacancies.
B. Structural Unemployment.
The shift toward more of a service economy and less of a manufacturing economy in the United
States has caused an increase in:
A. Frictional Unemployment.
B. Structural Unemployment.
C. Cyclical Unemployment.
D. Seasonal Unemployment.
