Econ 104: Exam 2 Questions and Answers 2025-2026
Which of the following is included in gross national product statistics? - -The final output
of all consumer goods and services available for immediate consumption.
-Which of the following would a classical macroeconomist disagree with? - -The interest
rate is the price of the money.
-Which of the following is true? - -The real money supply is equal to the nominal money
supply divided by a price index.
-Which of the following is true? - -Purchasing power parity looks at charge in domestic
versus foreign price levels.
-Which of the following is true? - -It is logically possible for both the natural rate of
unemployment and the cynical rate of unemployment to both simultaneously increase or
decrease together.
-What is not true with respect to various versions of the quantity theory? - -In the Fisher
version money is an asset whereas in the Cambridge version it is primarily a medium of
change.
-Which of the following is true? - -Minimum price controls cause surpluses in the market.
-Say's Law implies which of the following? - -None of the above are implied by Say's Law.
-Which of the following is not true about tariffs (import taxes) applied to imports? - -They
reduce unemployment across the economy.
-Using the income version of the quantity theory of money, calculate the annual inflation
rate if the following events occur: money supply increase 6%, velocity of circulation
decreases 3% and real quantity of output increases at 2%. The inflation rate would be: - -
1%
-Which of the following statements about money is not true? - -Paper money requires legal
tender laws before people will trust it and accept it.
-Which of the following is true? - -A repressed inflation actually magnifies inflation.
-Suppose we have the following data:
(4th order): Value of trees $5 per tree and 1,000 trees harvested;
(3rd order): 1,000 tree fabricated into $25 wood pulp per ton (1,000 tons);
(2nd order): 500,000 sheets of book paper ($0.10 per sheet) and 1,000 rolls facial tissue
($10 each);
Which of the following is included in gross national product statistics? - -The final output
of all consumer goods and services available for immediate consumption.
-Which of the following would a classical macroeconomist disagree with? - -The interest
rate is the price of the money.
-Which of the following is true? - -The real money supply is equal to the nominal money
supply divided by a price index.
-Which of the following is true? - -Purchasing power parity looks at charge in domestic
versus foreign price levels.
-Which of the following is true? - -It is logically possible for both the natural rate of
unemployment and the cynical rate of unemployment to both simultaneously increase or
decrease together.
-What is not true with respect to various versions of the quantity theory? - -In the Fisher
version money is an asset whereas in the Cambridge version it is primarily a medium of
change.
-Which of the following is true? - -Minimum price controls cause surpluses in the market.
-Say's Law implies which of the following? - -None of the above are implied by Say's Law.
-Which of the following is not true about tariffs (import taxes) applied to imports? - -They
reduce unemployment across the economy.
-Using the income version of the quantity theory of money, calculate the annual inflation
rate if the following events occur: money supply increase 6%, velocity of circulation
decreases 3% and real quantity of output increases at 2%. The inflation rate would be: - -
1%
-Which of the following statements about money is not true? - -Paper money requires legal
tender laws before people will trust it and accept it.
-Which of the following is true? - -A repressed inflation actually magnifies inflation.
-Suppose we have the following data:
(4th order): Value of trees $5 per tree and 1,000 trees harvested;
(3rd order): 1,000 tree fabricated into $25 wood pulp per ton (1,000 tons);
(2nd order): 500,000 sheets of book paper ($0.10 per sheet) and 1,000 rolls facial tissue
($10 each);
