ECO/372 Final Exam (Result - 30/30)
1. News Story: Workers at a car-manufacturing plant in Flint, Michigan are laid off because the economy is
weak and GM cars aren't selling well. GM isn't sure when the plant will reopen. What type of
unemployment describes the workers' situation?
Frictional unemployment
Structural unemployment
Full unemployment
Cyclical unemployment
2. Globalization that allows governments to pursue expansionary policies can be dangerous because it can
lead to:
A reduction in the debt ceiling
Goods price inflation
Asset price inflation
Goods price deflation
3. Macroeconomics is:
The study of aggregate economic relationships.
An analysis of economic reality that proceeds from the parts to the whole.
The study of pricing policies of firms and the purchasing decisions of households.
The study of individual choice and how that choice is influenced by economic forces.
4. Which of the following types of unemployment is considered to be the most controllable through
demand-side macroeconomic policy?
Frictional unemployment
Cyclical unemployment
Structural unemployment
Natural unemployment
, 5. If banks hold excess reserves whereas before they did not, the money multiplier:
Will become smaller
Will become larger
Might increase or might decrease
Will be unaffected
6. Using the expenditure approach, gross domestic product equals:
The sum of consumption, investment, government purchases, and net exports
Gross national product minus net exports
The sum of consumption, investment, and government purchases
Gross national product
7. How do investment in technology and investment in capital differ?
They have similar effects on output so they have no important differences from an economic
point of view.
They have the same effects on output but investments in technology are much more closely tied
to the level of saving than investments in capital.
They have different effects on output because of the positive externalities associated with
investments in capital.
They have different effects on output because of the positive externalities associate with
investments in technology.
8. The interest rate is the price paid for use of a:
Real asset.
Financial liability.
Financial asset.
Real liability.
9. If the reserve requirement is 20 percent, and banks keep no excess reserves, an increase in an initial
inflow of $100 into the banking system will cause an increase in the money supply of:
$50
1. News Story: Workers at a car-manufacturing plant in Flint, Michigan are laid off because the economy is
weak and GM cars aren't selling well. GM isn't sure when the plant will reopen. What type of
unemployment describes the workers' situation?
Frictional unemployment
Structural unemployment
Full unemployment
Cyclical unemployment
2. Globalization that allows governments to pursue expansionary policies can be dangerous because it can
lead to:
A reduction in the debt ceiling
Goods price inflation
Asset price inflation
Goods price deflation
3. Macroeconomics is:
The study of aggregate economic relationships.
An analysis of economic reality that proceeds from the parts to the whole.
The study of pricing policies of firms and the purchasing decisions of households.
The study of individual choice and how that choice is influenced by economic forces.
4. Which of the following types of unemployment is considered to be the most controllable through
demand-side macroeconomic policy?
Frictional unemployment
Cyclical unemployment
Structural unemployment
Natural unemployment
, 5. If banks hold excess reserves whereas before they did not, the money multiplier:
Will become smaller
Will become larger
Might increase or might decrease
Will be unaffected
6. Using the expenditure approach, gross domestic product equals:
The sum of consumption, investment, government purchases, and net exports
Gross national product minus net exports
The sum of consumption, investment, and government purchases
Gross national product
7. How do investment in technology and investment in capital differ?
They have similar effects on output so they have no important differences from an economic
point of view.
They have the same effects on output but investments in technology are much more closely tied
to the level of saving than investments in capital.
They have different effects on output because of the positive externalities associated with
investments in capital.
They have different effects on output because of the positive externalities associate with
investments in technology.
8. The interest rate is the price paid for use of a:
Real asset.
Financial liability.
Financial asset.
Real liability.
9. If the reserve requirement is 20 percent, and banks keep no excess reserves, an increase in an initial
inflow of $100 into the banking system will cause an increase in the money supply of:
$50
