ECO 201 CMPREHENSIVE QUESTIONS AND
CORRECT ANSWERS [ALREADY GRADED A+] 100%
NEWEST 2024 UPDATE
when interest rates are lower consumers and companies are able to borrow money
cheaply in order to make major purchases. as a result, the demand for goods in a
company will generally
a. increase
b. decrease
c. be minimally affected
d. remain the same - (correct answer) a. increase
Which of the following increases the slope of the consumption function?
a. an increase in the marginal propensity to consume.
b. an increase in consumer confidence.
c. an increase in consumer wealth.
d. decrease in the value of consumer durables. - (correct answer) a. an increase in
the marginal propensity to consume
an increase in consumer confidence will
a. increase autonomous consumption and shift the consumption function upward.
b. not change autonomous consumption and rotate the consumption function
downward.
c. not change autonomous consumption and rotate the consumption function upward
d. decrease autonomous consumption and shift the consumption function downward. -
(correct answer) a. increase autonomous consumption and shift the consumption
function upward.
the economy's ability to coordinate economic activity is hindered by
a. sticky wages causing sticky prices
b. workers whose wages change quickly
c. auction prices
d. all of the above - (correct answer) a. sticky wages causing sticky prices.
let s=y-(100+0.5y). Assume no government or foreign sectors. At the equilibrium level of
income y*=800, the level of saving is
a. 0
b. 50
c. 100
d. 300 - (correct answer) d. 300
assuming a long-run aggregate supply curve, a decrease in government spending
results in_______ in output and _____ in price level.
a. an increase; no change
b. a decrease; a decrease
, c. no change; a decrease
d. no change; an increase - (correct answer) c. no change; a decrease
When consumers realize additional income in a household and spend the additional
monies; the portion of the additional income that is spent is measured by the
a. marginal propensity to consume
b. aggregate demand factor
c. measure of individual wealth
d. credit increase theory - (correct answer) a. marginal propensity to consume
let "C = Ca + by' define the consumption function. The term "b" is known as
a. the marginal propensity to save
b. induced consumption
c. autonomous consumption
d. the marginal propensity to consume - (correct answer) d. the marginal propensity
to consume
Suppose the demand for hamburgers increases. In the short run, firms that produce
hamburgers will experience a rise in prices, which will induce them to
a. decrease production and decrease the number of workers
b. decrease production and increase the number of workers
c. increase production and decrease the number of workers
d. increase production and increase the number of workers - (correct answer) d.
increase production and increase the number of workers
let "C = Ca + by' define the consumption function. The term "Ca" is known as
a. inducted consumption
b. the marginal propensity to consume
c. autonomous consumption
d. the marginal propensity to save - (correct answer) c. autonomous consumption
If the consumption function is C = 25+0.9y and income increases by $100, then savings
will increase by
a. $10
b. $25
c. $90
d. $115 - (correct answer) a. $10
Which of the following is a problem with the price system that can lead to a breakdown
in the coordination of economic activity?
a. prices may be flexible
b. the price system works silently in the background
c. prices can be slow to adjust
d. all of the above - (correct answer) c. prices can be slow to adjust
CORRECT ANSWERS [ALREADY GRADED A+] 100%
NEWEST 2024 UPDATE
when interest rates are lower consumers and companies are able to borrow money
cheaply in order to make major purchases. as a result, the demand for goods in a
company will generally
a. increase
b. decrease
c. be minimally affected
d. remain the same - (correct answer) a. increase
Which of the following increases the slope of the consumption function?
a. an increase in the marginal propensity to consume.
b. an increase in consumer confidence.
c. an increase in consumer wealth.
d. decrease in the value of consumer durables. - (correct answer) a. an increase in
the marginal propensity to consume
an increase in consumer confidence will
a. increase autonomous consumption and shift the consumption function upward.
b. not change autonomous consumption and rotate the consumption function
downward.
c. not change autonomous consumption and rotate the consumption function upward
d. decrease autonomous consumption and shift the consumption function downward. -
(correct answer) a. increase autonomous consumption and shift the consumption
function upward.
the economy's ability to coordinate economic activity is hindered by
a. sticky wages causing sticky prices
b. workers whose wages change quickly
c. auction prices
d. all of the above - (correct answer) a. sticky wages causing sticky prices.
let s=y-(100+0.5y). Assume no government or foreign sectors. At the equilibrium level of
income y*=800, the level of saving is
a. 0
b. 50
c. 100
d. 300 - (correct answer) d. 300
assuming a long-run aggregate supply curve, a decrease in government spending
results in_______ in output and _____ in price level.
a. an increase; no change
b. a decrease; a decrease
, c. no change; a decrease
d. no change; an increase - (correct answer) c. no change; a decrease
When consumers realize additional income in a household and spend the additional
monies; the portion of the additional income that is spent is measured by the
a. marginal propensity to consume
b. aggregate demand factor
c. measure of individual wealth
d. credit increase theory - (correct answer) a. marginal propensity to consume
let "C = Ca + by' define the consumption function. The term "b" is known as
a. the marginal propensity to save
b. induced consumption
c. autonomous consumption
d. the marginal propensity to consume - (correct answer) d. the marginal propensity
to consume
Suppose the demand for hamburgers increases. In the short run, firms that produce
hamburgers will experience a rise in prices, which will induce them to
a. decrease production and decrease the number of workers
b. decrease production and increase the number of workers
c. increase production and decrease the number of workers
d. increase production and increase the number of workers - (correct answer) d.
increase production and increase the number of workers
let "C = Ca + by' define the consumption function. The term "Ca" is known as
a. inducted consumption
b. the marginal propensity to consume
c. autonomous consumption
d. the marginal propensity to save - (correct answer) c. autonomous consumption
If the consumption function is C = 25+0.9y and income increases by $100, then savings
will increase by
a. $10
b. $25
c. $90
d. $115 - (correct answer) a. $10
Which of the following is a problem with the price system that can lead to a breakdown
in the coordination of economic activity?
a. prices may be flexible
b. the price system works silently in the background
c. prices can be slow to adjust
d. all of the above - (correct answer) c. prices can be slow to adjust
