Econ 102 Midterm
Winter 2026
Name:
Student ID:
Exam Rules
1. The exam starts at 2pm and ends at 3:15pm.
2. The exam is out of 250 points. There are 8 multiple choice questions worth 10 points each and
three open response questions worth 50 points each. The last 20 points will come from completing
a post-midterm survey on Canvas (due within a week).
3. Make sure to fill in the scantron for multiple choice questions. You will not be given extra time at
the end.
4. You may use a calculator (including graphing calculator) and one 3x5 note card. You should also
have your Bruin ID and something to write with. Please put all other items away. If you have a
phone out for any reason you will be given a 0 on the exam.
5. Please make sure to write dark enough and avoid writing too close to the page margins as we will
be scanning your exams.
6. You must SHOW ALL WORK. No credit will be given for an answer with no work. You may
leave an answer unsimplified, but be clear about the steps you took to get there so the graders can
easily see if it’s correct.
7. If you have a question or need to use the bathroom, please raise your hand and a TA will assist you.
1
, Multiple Choice (10 Points Each)
1. Which of the following would increase US GDP this year?
(a) All of these would increase US GDP this year
(b) A US retailer purchases shoes from a Chinese manufacturer for $30 and sells them
to a US consumer for $50
(c) None of these would increase US GDP this year
(d) A US retailer sells shoes out of its inventory that were produced in the previous year
(e) A US retailer purchases shoes from a Chinese manufacturer and puts them in a warehouse
2. A hamburger stand purchases $100 of bread, $200 of cheese, and $500 of beef from local suppliers.
Using all of these materials, it produces 100 hamburgers, which it sells for $10 each. How much do
all of these activities add to GDP and what is the value added of the hamburger stand?
(a) GDP increases by $1000 and the hamburger stand’s value added is $200
(b) GDP increases by $200 and the hamburger stand’s value added is $200
(c) GDP increases by $1800 and the hamburger stand’s value added is $200
(d) GDP increases by $1800 and the hamburger stand’s value added is $1000
(e) GDP increases by $1000 and the hamburger stand’s value added is $1000
3. A bad harvest limits the supply of apples in a country, driving up the price substantially.
Consumers respond immediately by shifting a large share of their fruit consumption from apples to
bananas, which are primarily imported from other countries, and whose price is unchanged.
Assume apples and bananas provide roughly the same utility. Which of the following price indexes
would best capture the true change in consumers’ cost of living?
(a) The GDP Deflator
(b) The Core PCE Deflator
(c) The Consumer Price Index (CPI)
(d) The Producer Price Index (PPI)
(e) The PCE Deflator
4. Government spending increases. According to the loanable funds model, the increase in spending
would cause
(a) An increase in interest rates and a decrease in private investment
(b) A decrease in interest rates and a decrease in private investment
(c) An increase in interest rates and no change in private investment
(d) A decrease in interest rates and an increase in private investment
(e) An increase in interest rates and an increase in private investment
2
Winter 2026
Name:
Student ID:
Exam Rules
1. The exam starts at 2pm and ends at 3:15pm.
2. The exam is out of 250 points. There are 8 multiple choice questions worth 10 points each and
three open response questions worth 50 points each. The last 20 points will come from completing
a post-midterm survey on Canvas (due within a week).
3. Make sure to fill in the scantron for multiple choice questions. You will not be given extra time at
the end.
4. You may use a calculator (including graphing calculator) and one 3x5 note card. You should also
have your Bruin ID and something to write with. Please put all other items away. If you have a
phone out for any reason you will be given a 0 on the exam.
5. Please make sure to write dark enough and avoid writing too close to the page margins as we will
be scanning your exams.
6. You must SHOW ALL WORK. No credit will be given for an answer with no work. You may
leave an answer unsimplified, but be clear about the steps you took to get there so the graders can
easily see if it’s correct.
7. If you have a question or need to use the bathroom, please raise your hand and a TA will assist you.
1
, Multiple Choice (10 Points Each)
1. Which of the following would increase US GDP this year?
(a) All of these would increase US GDP this year
(b) A US retailer purchases shoes from a Chinese manufacturer for $30 and sells them
to a US consumer for $50
(c) None of these would increase US GDP this year
(d) A US retailer sells shoes out of its inventory that were produced in the previous year
(e) A US retailer purchases shoes from a Chinese manufacturer and puts them in a warehouse
2. A hamburger stand purchases $100 of bread, $200 of cheese, and $500 of beef from local suppliers.
Using all of these materials, it produces 100 hamburgers, which it sells for $10 each. How much do
all of these activities add to GDP and what is the value added of the hamburger stand?
(a) GDP increases by $1000 and the hamburger stand’s value added is $200
(b) GDP increases by $200 and the hamburger stand’s value added is $200
(c) GDP increases by $1800 and the hamburger stand’s value added is $200
(d) GDP increases by $1800 and the hamburger stand’s value added is $1000
(e) GDP increases by $1000 and the hamburger stand’s value added is $1000
3. A bad harvest limits the supply of apples in a country, driving up the price substantially.
Consumers respond immediately by shifting a large share of their fruit consumption from apples to
bananas, which are primarily imported from other countries, and whose price is unchanged.
Assume apples and bananas provide roughly the same utility. Which of the following price indexes
would best capture the true change in consumers’ cost of living?
(a) The GDP Deflator
(b) The Core PCE Deflator
(c) The Consumer Price Index (CPI)
(d) The Producer Price Index (PPI)
(e) The PCE Deflator
4. Government spending increases. According to the loanable funds model, the increase in spending
would cause
(a) An increase in interest rates and a decrease in private investment
(b) A decrease in interest rates and a decrease in private investment
(c) An increase in interest rates and no change in private investment
(d) A decrease in interest rates and an increase in private investment
(e) An increase in interest rates and an increase in private investment
2
