ECN 211 ASU FINAL EXAM 2026 UPDATED QUESTIONS AND
SOLUTIONS GRADED A+
✔✔What causes productivity? - ✔✔- Human Capital
- Natural Resources
- Physical Capital
- Technological Knowledge
✔✔Human Capital - ✔✔Knowledge and skills of workers (education, training)
✔✔Natural Resources - ✔✔Anything that comes from nature (timber, oil, coal)
✔✔Physical Capital - ✔✔All the physical tools and machines used to do business
✔✔Technological Knowledge - ✔✔The general knowledge of the world
✔✔GDP Equation - ✔✔GDP = G + C + I + NX = ALL PRODUCTION = ALL
CONSUMPTION
✔✔Consumption (C) - ✔✔Things purchased for final use
✔✔Investment (I) - ✔✔Things purchased to use to make more money later
✔✔Government Spending (G) - ✔✔Any money the government uses
✔✔Nominal GDP - ✔✔is this years' prices * this years quantities
✔✔Real GDP - ✔✔is base years' prices * is years quantities
✔✔GDP Deflator - ✔✔Nominal GDP/Real GDP*100
✔✔Inflation - ✔✔using GDP deflator = (this years deflator - last years' deflator) last
years' deflator
✔✔CPI- Consumer Price Index - ✔✔Makes a basket of good to calculate the cost of
living for a given year. Multiply current year prices * base year quantities
✔✔Price Index - ✔✔Costs of this years basket * 100
✔✔Labor Force Participation Rate - ✔✔labor force/adult population * 100
✔✔Unemployment rate - ✔✔unemployed workers/labor force*100
✔✔Types of Unemployment - ✔✔- Frictional
, - Cyclical
- Structural
✔✔frictional unemployment - ✔✔The time it takes for employees and employers to find
each other
✔✔cyclical unemployment - ✔✔The cycle of money
✔✔structural unemployment - ✔✔The structure of the economy
✔✔Labor force - ✔✔Anyone in the adult population who is able to work
✔✔Discouraged Worker - ✔✔Someone who is out of work and no longer looking for a
job
✔✔Employed - ✔✔Person with a job
✔✔Unemployed - ✔✔Someone who did not work in the last week and is actively
seeking employment
✔✔People can "save" their money in numerous ways - ✔✔- Corporate bonds
- Municipal bonds
- Stocks
- Deposit certificates
✔✔Corporate Bonds - ✔✔Individual loans money to a company in return for interest the
more risky the company the higher the interest
✔✔Municipal bond - ✔✔Loan money to the government usually the lowest interest rate
but also the least risk of getting paid back. Can loan to foreign governments
✔✔Stocks - ✔✔Purchase ownership in company
✔✔Deposit Certificates - ✔✔Depositing money in a bank
✔✔Y(GDP) - ✔✔Y(GDP) = C + I + G
✔✔S(pub) = PUBLIC SAVINGS - ✔✔S(pub) = PUBLIC SAVINGS = T - G
✔✔S (priv) = PRIVATE SAVINGS - ✔✔S (priv) = PRIVATE SAVINGS = Y - C - T
✔✔S(tot) = PUBLIC PRIVATE SAVINGS - ✔✔S(tot) = PUBLIC PRIVATE SAVINGS = I
✔✔Money can be used as a... - ✔✔- Medium of exchange
SOLUTIONS GRADED A+
✔✔What causes productivity? - ✔✔- Human Capital
- Natural Resources
- Physical Capital
- Technological Knowledge
✔✔Human Capital - ✔✔Knowledge and skills of workers (education, training)
✔✔Natural Resources - ✔✔Anything that comes from nature (timber, oil, coal)
✔✔Physical Capital - ✔✔All the physical tools and machines used to do business
✔✔Technological Knowledge - ✔✔The general knowledge of the world
✔✔GDP Equation - ✔✔GDP = G + C + I + NX = ALL PRODUCTION = ALL
CONSUMPTION
✔✔Consumption (C) - ✔✔Things purchased for final use
✔✔Investment (I) - ✔✔Things purchased to use to make more money later
✔✔Government Spending (G) - ✔✔Any money the government uses
✔✔Nominal GDP - ✔✔is this years' prices * this years quantities
✔✔Real GDP - ✔✔is base years' prices * is years quantities
✔✔GDP Deflator - ✔✔Nominal GDP/Real GDP*100
✔✔Inflation - ✔✔using GDP deflator = (this years deflator - last years' deflator) last
years' deflator
✔✔CPI- Consumer Price Index - ✔✔Makes a basket of good to calculate the cost of
living for a given year. Multiply current year prices * base year quantities
✔✔Price Index - ✔✔Costs of this years basket * 100
✔✔Labor Force Participation Rate - ✔✔labor force/adult population * 100
✔✔Unemployment rate - ✔✔unemployed workers/labor force*100
✔✔Types of Unemployment - ✔✔- Frictional
, - Cyclical
- Structural
✔✔frictional unemployment - ✔✔The time it takes for employees and employers to find
each other
✔✔cyclical unemployment - ✔✔The cycle of money
✔✔structural unemployment - ✔✔The structure of the economy
✔✔Labor force - ✔✔Anyone in the adult population who is able to work
✔✔Discouraged Worker - ✔✔Someone who is out of work and no longer looking for a
job
✔✔Employed - ✔✔Person with a job
✔✔Unemployed - ✔✔Someone who did not work in the last week and is actively
seeking employment
✔✔People can "save" their money in numerous ways - ✔✔- Corporate bonds
- Municipal bonds
- Stocks
- Deposit certificates
✔✔Corporate Bonds - ✔✔Individual loans money to a company in return for interest the
more risky the company the higher the interest
✔✔Municipal bond - ✔✔Loan money to the government usually the lowest interest rate
but also the least risk of getting paid back. Can loan to foreign governments
✔✔Stocks - ✔✔Purchase ownership in company
✔✔Deposit Certificates - ✔✔Depositing money in a bank
✔✔Y(GDP) - ✔✔Y(GDP) = C + I + G
✔✔S(pub) = PUBLIC SAVINGS - ✔✔S(pub) = PUBLIC SAVINGS = T - G
✔✔S (priv) = PRIVATE SAVINGS - ✔✔S (priv) = PRIVATE SAVINGS = Y - C - T
✔✔S(tot) = PUBLIC PRIVATE SAVINGS - ✔✔S(tot) = PUBLIC PRIVATE SAVINGS = I
✔✔Money can be used as a... - ✔✔- Medium of exchange
