ASU ECN 211 FINAL EXAM Review (Chapters 1-
4, 6, 10-12, 15-17, 20-22) Latest Update 2025-2026
100 Questions and 100% Verified Correct
Answers Guaranteed A+
A main cause of large or persistent inflation is: - CORRECT ANSWER: Excessive
growth in the money supply
A soft drink cost $1.75 in 2019. The value for the CPI in 1965 is 60.2 and the value of
the CPI for 2019 is 236.2, what is the price of a soft drink in 1965 dollars? - CORRECT
ANSWER: $0.45
About what fraction of workers leave their jobs in a typical month? - CORRECT
ANSWER: 3 in 100
An economy recently had nominal GDP of 5 trillion euro and a GDP deflator of 125.
What was real GDP? - CORRECT ANSWER: 4 trillion euro, and real GDP is a better
gauge of economic activity than nominal GDP
An improvement in technology would cause the long-run aggregate-supply curve to
shift: - CORRECT ANSWER: Right.
Any point outside a country's production possibilities frontier represents a combination
of two goods that an economy - CORRECT ANSWER: Cannot currently produce.
As the reserve ratio increases, the money multiplier: - CORRECT ANSWER: Decreases
Because the price level does not affect the long-run determinants of real GDP, the long-
run aggregate-supply curve is upward-sloping. - CORRECT ANSWER: False
, Bertha bought 10 shares of iSnack stock for $1 per share. In one year, she sold 5
shares for $5 a share. During this year, the price level increased from 140 to 147. What
is Bertha's before-tax real capital gain? - CORRECT ANSWER: $19
100 x ((147-140)/140)= 5%
5 x $5 = $25
$25 - $5 = $20
$20 - $20 x 0.05 = $19
Both the production of goods and services and the unemployment rate are used to
measure the business cycle. - CORRECT ANSWER: True
Changes in taxes or government spending that increase aggregate demand without
requiring policy makers to act when the economy goes into a recession are called: -
CORRECT ANSWER: Automatic stabilizers
China has a comparative advantage in the production of silk, but Japan has an absolute
advantage in the production of silk. If these two countries decide to trade: - CORRECT
ANSWER: China should export silk to Japan
Consider three countries with diminishing returns to capital. Country A has real GDP per
person of $12,000; Country B has real GDP per person of $20,000; Country C has real
GDP per person of $25,000. Suppose that the saving rate increases by the same rate in
all three countries. - CORRECT ANSWER: For the next few years, Country A will grow
fast than Countries B and C.
Cyclical unemployment is closely associated with the short-run ups and downs of
economic activity. - CORRECT ANSWER: True
4, 6, 10-12, 15-17, 20-22) Latest Update 2025-2026
100 Questions and 100% Verified Correct
Answers Guaranteed A+
A main cause of large or persistent inflation is: - CORRECT ANSWER: Excessive
growth in the money supply
A soft drink cost $1.75 in 2019. The value for the CPI in 1965 is 60.2 and the value of
the CPI for 2019 is 236.2, what is the price of a soft drink in 1965 dollars? - CORRECT
ANSWER: $0.45
About what fraction of workers leave their jobs in a typical month? - CORRECT
ANSWER: 3 in 100
An economy recently had nominal GDP of 5 trillion euro and a GDP deflator of 125.
What was real GDP? - CORRECT ANSWER: 4 trillion euro, and real GDP is a better
gauge of economic activity than nominal GDP
An improvement in technology would cause the long-run aggregate-supply curve to
shift: - CORRECT ANSWER: Right.
Any point outside a country's production possibilities frontier represents a combination
of two goods that an economy - CORRECT ANSWER: Cannot currently produce.
As the reserve ratio increases, the money multiplier: - CORRECT ANSWER: Decreases
Because the price level does not affect the long-run determinants of real GDP, the long-
run aggregate-supply curve is upward-sloping. - CORRECT ANSWER: False
, Bertha bought 10 shares of iSnack stock for $1 per share. In one year, she sold 5
shares for $5 a share. During this year, the price level increased from 140 to 147. What
is Bertha's before-tax real capital gain? - CORRECT ANSWER: $19
100 x ((147-140)/140)= 5%
5 x $5 = $25
$25 - $5 = $20
$20 - $20 x 0.05 = $19
Both the production of goods and services and the unemployment rate are used to
measure the business cycle. - CORRECT ANSWER: True
Changes in taxes or government spending that increase aggregate demand without
requiring policy makers to act when the economy goes into a recession are called: -
CORRECT ANSWER: Automatic stabilizers
China has a comparative advantage in the production of silk, but Japan has an absolute
advantage in the production of silk. If these two countries decide to trade: - CORRECT
ANSWER: China should export silk to Japan
Consider three countries with diminishing returns to capital. Country A has real GDP per
person of $12,000; Country B has real GDP per person of $20,000; Country C has real
GDP per person of $25,000. Suppose that the saving rate increases by the same rate in
all three countries. - CORRECT ANSWER: For the next few years, Country A will grow
fast than Countries B and C.
Cyclical unemployment is closely associated with the short-run ups and downs of
economic activity. - CORRECT ANSWER: True
