ECON 200 UOFA Exam 3
ECON 200 UOFA EXAM 3 NEWEST 2025 COMPLETE 150
QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+||BRAND NEW!!
While many analysts defended the actions taken by the Fed and the Treasury to respond to the
financial crisis in 2008, others were critical of these actions. The critics were concerned that by
not allowing large firms to fail that there is an increased likelihood that other firms will engage
in risky behavior in the future with the expectation that they will also not be allowed to fail. This
undesirable change in firm behavior is known as
A) adverse selection
B) moral hazard
C) quantitative easing
D) open market operations - ANSWER-moral hazard
If the economy is falling below potential real GDP, which of the following would be an
appropriate fiscal policy to bring the economy back to long-run aggregate supply? A) the money
supply and a decrease in interest rates.
B) government purchases.
C) oil prices.
D) taxes. - ANSWER-government purchases
Crowding out refers to a decline in ________ as a result of an increase in ________
A) tax revenues; unemployment
B) government purchases; tax rates
C) government purchases; private expenditures
D) private expenditures; government purchases - ANSWER-private expenditures; government
purchases
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, ECON 200 UOFA Exam 3
Which of the following is an example of expansionary fiscal policy?)
A) increase in taxes
B) stimulus package
C) increasing the money supply
D) lowering interest rates - ANSWER-stimulus package
Suppose the MPC is 0.9. What will the total GDP impact be of a $400 billion increase in
government spending?
A) $360 billion
B) $760 billion
C) $1 trillion
D) $4 trillion - ANSWER-4$ trillion
Which of the following is an example of an automatic stabilizer?A) Federal Reserve interest rates
B) discretionary outlays
C) progressive income taxes
D) education subsidies - ANSWER-progressive income taxes
Which of these solutions is the BEST way to avoid the buildup of debt?
A) Match the growth of the money supply to the long-run growth of the economy
B) Balance the budget over the course of the business cycle
C) The Federal Reserve creates hyperinflation to make the debt worthless
D) Give the President a line item veto on everything Congress passes - ANSWER-Balance the
budget over the course of the business cycle
The US National Debt is approximately
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, ECON 200 UOFA Exam 3
A) 180 million dollars
B) 1.8 billion dollars
C) 18 trillion dollars
D) 180 quadrillion dollars - ANSWER-18 trillion dollars
By 2030, how many workers will there be to support each Social Security recipient?
A) 12
B) 6
C) 2
D) 20 - ANSWER-2
Countries that engage in trade will tend to specialize in the production of goods and services in
which they have ________ and will ________ these goods and services
A) a comparative advantage; import
B) an absolute advantage; export
C) a comparative advantage; export
D) an absolute advantage; import - ANSWER-a comparative advantage; export
Which of the following statements is true?
A) All individuals in both countries are made better off as a result of international trade.
B) Within each country, some individuals are made better off as a result of international trade,
but one of the countries will be worse off overall.
C) Although some individuals are made better off as a result of international trade, both
countries may be made worse off overall.
D) Each country as a whole is made better off as a result of international trade, but individuals
within each country may be made worse off. - ANSWER-D) Each country as a whole is made
better off as a result of international trade, but individuals within each country may be made
worse off.
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ECON 200 UOFA EXAM 3 NEWEST 2025 COMPLETE 150
QUESTIONS AND CORRECT ANSWERS (VERIFIED ANSWERS)
|ALREADY GRADED A+||BRAND NEW!!
While many analysts defended the actions taken by the Fed and the Treasury to respond to the
financial crisis in 2008, others were critical of these actions. The critics were concerned that by
not allowing large firms to fail that there is an increased likelihood that other firms will engage
in risky behavior in the future with the expectation that they will also not be allowed to fail. This
undesirable change in firm behavior is known as
A) adverse selection
B) moral hazard
C) quantitative easing
D) open market operations - ANSWER-moral hazard
If the economy is falling below potential real GDP, which of the following would be an
appropriate fiscal policy to bring the economy back to long-run aggregate supply? A) the money
supply and a decrease in interest rates.
B) government purchases.
C) oil prices.
D) taxes. - ANSWER-government purchases
Crowding out refers to a decline in ________ as a result of an increase in ________
A) tax revenues; unemployment
B) government purchases; tax rates
C) government purchases; private expenditures
D) private expenditures; government purchases - ANSWER-private expenditures; government
purchases
1|Page
, ECON 200 UOFA Exam 3
Which of the following is an example of expansionary fiscal policy?)
A) increase in taxes
B) stimulus package
C) increasing the money supply
D) lowering interest rates - ANSWER-stimulus package
Suppose the MPC is 0.9. What will the total GDP impact be of a $400 billion increase in
government spending?
A) $360 billion
B) $760 billion
C) $1 trillion
D) $4 trillion - ANSWER-4$ trillion
Which of the following is an example of an automatic stabilizer?A) Federal Reserve interest rates
B) discretionary outlays
C) progressive income taxes
D) education subsidies - ANSWER-progressive income taxes
Which of these solutions is the BEST way to avoid the buildup of debt?
A) Match the growth of the money supply to the long-run growth of the economy
B) Balance the budget over the course of the business cycle
C) The Federal Reserve creates hyperinflation to make the debt worthless
D) Give the President a line item veto on everything Congress passes - ANSWER-Balance the
budget over the course of the business cycle
The US National Debt is approximately
2|Page
, ECON 200 UOFA Exam 3
A) 180 million dollars
B) 1.8 billion dollars
C) 18 trillion dollars
D) 180 quadrillion dollars - ANSWER-18 trillion dollars
By 2030, how many workers will there be to support each Social Security recipient?
A) 12
B) 6
C) 2
D) 20 - ANSWER-2
Countries that engage in trade will tend to specialize in the production of goods and services in
which they have ________ and will ________ these goods and services
A) a comparative advantage; import
B) an absolute advantage; export
C) a comparative advantage; export
D) an absolute advantage; import - ANSWER-a comparative advantage; export
Which of the following statements is true?
A) All individuals in both countries are made better off as a result of international trade.
B) Within each country, some individuals are made better off as a result of international trade,
but one of the countries will be worse off overall.
C) Although some individuals are made better off as a result of international trade, both
countries may be made worse off overall.
D) Each country as a whole is made better off as a result of international trade, but individuals
within each country may be made worse off. - ANSWER-D) Each country as a whole is made
better off as a result of international trade, but individuals within each country may be made
worse off.
3|Page
