Eco 372 Final Exam
1. The buyers and sellers in the country of Perylia use corn as a medium of exchange. This means that:
A. Perylia uses commodity money.
2. Suppose the Fed purchases government bonds through open-market operations. All other things
remaining equal, this is likely to
A. increase the price level and eventually decrease the demand for money as well as goods and
services.
3. As more capital is used in the production process, the amount of other inputs being fixed, the
production function becomes:
A. flat because the extra output produced from an additional unit of capital increases.
4. The exhibit given below shows the short-run aggregate demand and supply curves in an economy,
AD1 and AS1, and the long-run aggregate supply curve, LRAS. The economy was initially in equilibrium
when there was a decrease in aggregate demand, causing a shift of the aggregate demand curve from
AD1 to AD2. Which of the following is true in this case?
, A. The economy will move from point B to point A in the short run and then to point C in the long
run.
5. A difference between commodity money and fiat money is that
A. fiat money does not have any intrinsic value.
6. Suppose the net foreign investment in Italy is positive. This implies that:
A. Italy is experiencing a net capital inflow.
7. There is an increase in human capital when _____
Susie puts in more than 8 hours of work at her workplace every day
8. Suppose the net capital outflow from Zenovia is negative. This implies that:
A. the citizens of Zenovia are investing more in foreign assets than foreigners are investing in
assets in Zenovia.
9. A recent survey showed the health benefits of cranberry juice for treating heart and other respiratory
disorders. The exhibit below shows that the initial demand curve for cranberry juice is D 1. Which of the
following is likely to be a consequence of the publication of the survey?
A. There will be a movement from point A to point C on D 1.
10. Suppose the central bank of a country undertakes an expansionary monetary policy. Which of the
following is most likely to be the effect of such a policy, all other things remaining unchanged?
1. The buyers and sellers in the country of Perylia use corn as a medium of exchange. This means that:
A. Perylia uses commodity money.
2. Suppose the Fed purchases government bonds through open-market operations. All other things
remaining equal, this is likely to
A. increase the price level and eventually decrease the demand for money as well as goods and
services.
3. As more capital is used in the production process, the amount of other inputs being fixed, the
production function becomes:
A. flat because the extra output produced from an additional unit of capital increases.
4. The exhibit given below shows the short-run aggregate demand and supply curves in an economy,
AD1 and AS1, and the long-run aggregate supply curve, LRAS. The economy was initially in equilibrium
when there was a decrease in aggregate demand, causing a shift of the aggregate demand curve from
AD1 to AD2. Which of the following is true in this case?
, A. The economy will move from point B to point A in the short run and then to point C in the long
run.
5. A difference between commodity money and fiat money is that
A. fiat money does not have any intrinsic value.
6. Suppose the net foreign investment in Italy is positive. This implies that:
A. Italy is experiencing a net capital inflow.
7. There is an increase in human capital when _____
Susie puts in more than 8 hours of work at her workplace every day
8. Suppose the net capital outflow from Zenovia is negative. This implies that:
A. the citizens of Zenovia are investing more in foreign assets than foreigners are investing in
assets in Zenovia.
9. A recent survey showed the health benefits of cranberry juice for treating heart and other respiratory
disorders. The exhibit below shows that the initial demand curve for cranberry juice is D 1. Which of the
following is likely to be a consequence of the publication of the survey?
A. There will be a movement from point A to point C on D 1.
10. Suppose the central bank of a country undertakes an expansionary monetary policy. Which of the
following is most likely to be the effect of such a policy, all other things remaining unchanged?
