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Category > Economics Posted 07 May 2020 My Price 14.00

ECO 102 Macroeconomics Unit 1 Challenge 1 and 2

ECO 102 Macroeconomics Unit 1 Challenge 1 and 2

Click below link for Answers

Unit 1 Challenge 1

Which of the following statements describes macroeconomics?

·        A.)

It is an academic discipline that looks at variables that affect the quality of human life.

·        B.)

It considers the behavior of individuals and firms on an individual level.

·        C.)

It looks at the overall ups and downs of the economy.

·        D.)

It looks at how individuals and entities optimize the decisions they make.

Macroeconomics would include the study of __________.

·        A.)

prices of individual goods

·        B.)

national infrastructures

·        C.)

household spending

·        D.)

small firms

Microeconomics involves decisions made by __________.

  • A.)

firms and households

  • B.)

governments and societies

  • C.)

countries and International organizations

  • D.)

governments and economies

Studying macroeconomics helps us learn about the value and limitations of __________, which occurs across nations, typically involving foreign exchange transactions.

  • A.)

fiscal policy

  • B.)

business cycles

  • C.)

economic indicators

  • D.)

global trade

Macroeconomists look at __________ to study the overall health of the economy.

  • A.)

capital flow

  • B.)

monetary policy

  • C.)

global trade

  • D.)

economic indicators

Which of the following topics can macroeconomics help a person understand?

  • A.)

How to handle your personal finances responsibly

  • B.)

The impact of global trade

  • C.)

What makes a good investment

  • D.)

Decision making on an individual level

In the Circular Flow diagram, households __________.

  • A.)

purchase final goods and services

  • B.)

place taxes on goods and service

  • C.)

purchase factors of production

  • D.)

act only as consumers

In the Circular Flow model, what do firms purchase?

  • A.)

Final goods and services

  • B.)

Labor from households

  • C.)

Goods from tax revenue

  • D.)

Factors of production from the government

In the Circular Flow model, governments __________

  • A.)

consume intermediate goods, before they are taxed

  • B.)

produce some final goods and services

  • C.)

do not interact with firms and households

  • D.)

act as only consumers of goods and services

GDP per capita is often used to measure the ______.

  • A.)

GDP adjusted for inflation

  • B.)

standard of living

  • C.)

overall GDP growth rate for an economy

  • D.)

gross national product

GDP is best described as __________.

  • A.)

the amount of intermediate goods produced in a country in a given year

  • B.)

the value of economic activity by all U.S. citizens around the world

  • C.)

the amount of goods and services produced in a country in a given year

  • D.)

the value of economic activity that takes place in a country in a given year

Which statement below is NOT true about GDP?

  • A.)

It is one of the most common measures of the health of the macroeconomy.

  • B.)

There are different ways to calculate GDP.

  • C.)

It includes value from leisure.

  • D.)

It attempts to measure all economic activity that takes place inside a country in a given year.

In 2009, the yearly tuition at a state university is $20,000. In 2017, the yearly tuition at the same state university is $31,000.

Using the price of tuition for reference, the inflation rate of the U.S. dollar increased by a factor of __________ in eight years.

  • A.)

1.65

  • B.)

1.55

  • C.)

0.65

  • D.)

0.35

In January 2008, a bag of rice cost five million Zimbabwean dollars. Several months later, the same bag of rice cost 250 million Zimbabwean dollars.

Using the price of rice for reference, the inflation rate of the Zimbabwean dollar increased by a factor of __________ in just a few months.

  • A.)

50

  • B.)

20

  • C.)

5

  • D.)

2

In 2010, the average cost of a house in France is 126,000 euros. In 2018, the average cost is 154,000 euros.

Using the price of the average house for reference, the inflation rate of the Euro increased by a factor of __________ in eight years.

  • A.)

0.22

  • B.)

0.18

  • C.)

0.82

  • D.)

1.22

When GDP growth is at its maximum, given current resources, the business cycle is said to be in which phase?

  • A.)

Peak

  • B.)

Expansion

  • C.)

Trough

  • D.)

Contraction

 

The business cycle period in which the economy shows growth is the __________.

  • A.)

peak

  • B.)

trough

  • C.)

expansion

  • D.)

contraction

A _________ is a decline in economic activity that lasts more than a few months and is visible in _________.

  • A.)

trough; real GDP

  • B.)

recession; expansion

  • C.)

recession; real GDP

  • D.)

trough; expansion

The business cycle period in which the economy shows growth is the __________.

  • A.)

peak

  • B.)

trough

  • C.)

expansion

  • D.)

contraction

A _________ is a decline in economic activity that lasts more than a few months and is visible in _________.

  • A.)

trough; real GDP

  • B.)

recession; expansion

  • C.)

recession; real GDP

  • D.)

trough; expansion

If the government takes on a program of increased spending and tax cuts, which combination below correctly describes these policies?

  • A.)

Expansionary monetary

  • B.)

Contractionary monetary

  • C.)

Expansionary fiscal

  • D.)

Contractionary fiscal

Which of the following policies is implemented when the economy is growing too quickly?

  • A.)

A tax increase by the government

  • B.)

A spending increase by the government

  • C.)

Lowered interest rates by a central bank

  • D.)

Lowered reserve requirement by a central bank

If a central banking authority lowers interest rates in order to encourage more borrowing, which of the following combinations describes this type of policy?

  • A.)

Expansionary monetary

  • B.)

Expansionary fiscal

  • C.)

Contractionary monetary

  • D.)

Contractionary fiscal

Which of the following choices is a form of government sponsored automatic stabilizers in the U.S.?

  • A.)

Progressive income tax

  • B.)

National defense

  • C.)

Monetary policy

  • D.)

Police protection

Almost all of the theories regarding the proper role of government suggest that it should provide __________ such as national defense. One of the most important tools the government can use to stabilize the economy is __________.

  • A.)

income redistribution; spending

  • B.)

public goods; spending

  • C.)

public goods; GDP growth

  • D.)

income redistribution; GDP growth

Multiple theories exist about the proper role/functions of government.

Many suggest that the government should promote __________, which is funded through ___________.

  • A.)

income redistribution; progressive taxation

  • B.)

transfer payments; GDP growth

  • C.)

public goods; progressive taxation

  • D.)

progressive tax; GDP growth

Unit 1 Challenge 2

When quantity supplied and quantity demanded are the same, a market is said to be in __________.

  • A.)

equilibrium

  • B.)

a surplus

  • C.)

a downturn

  • D.)

a shortage

An increase in income, and thus consumption, would cause which of the following to occur?

  • A.)

A movement down along the demand curve

  • B.)

The demand curve to shift to the right

  • C.)

A movement up along the demand curve

  • D.)

The demand curve to shift to the left

 

Movements along the supply curve are a result of changes in __________.

  • A.)

resource access

  • B.)

price

  • C.)

input prices

  • D.)

regulations

When a good is unit elastic, the absolute value of the elasticity is ___________.

  • A.)

equal to one

  • B.)

greater than one

  • C.)

less than one

  • D.)

greater than 10

If income elasticity is positive, but less than one, this good is considered to be a __________.

  • A.)

luxury good

  • B.)

normal good

  • C.)

inferior good

  • D.)

public good

Cross-price elasticity refers to changes in demand that happen due to changes in price of related goods.

If this value is negative for two goods or services, then they are __________.

If this value is positive, then they are __________.

  • A.)

inferior; luxury

  • B.)

luxury; inferior

  • C.)

substitutes; complementary

  • D.)

complementary; substitutes

In 2007, the government attempted to end inflation by enforcing a price freeze on basic commodities such as corn, sugar and eggs. This led to runs on grocery stores and other places that sold such items, since in some cases the prices were rolled back to almost 50% of what they had been. A shortage occurred because people rushed to stock up on these items as much as they could.

In this example, the freeze on prices is known as a government enforced __________, with businesses forbidden to charge more than the price set by the government. These government enforced price constraints are binding because they are lower than the __________.

  • A.)

price floor; price ceiling

  • B.)

price ceiling; equilibrium price

  • C.)

price floor; equilibrium price

  • D.)

price ceiling; price floor

Minimum wage is a type of __________ that enforces a lower limit on wages. When these occur, they create a __________ of labor, because there are more people who want to be paid at this rate than there are firms that are willing to pay them.

  • A.)

price ceiling; surplus

  • B.)

price ceiling; shortage

  • C.)

price floor; surplus

  • D.)

price floor; shortage

If a price floor is set below the equilibrium price (P) above, which of the following will occur?

  • A.)

The market will incur a deadweight loss.

  • B.)

Nothing, as this price floor would not be binding.

  • C.)

A surplus will result.

  • D.)

A shortage will result.

If demand is inelastic, the _________ will bear more of the burden of the tax.

  • A.)

consumer

  • B.)

government

  • C.)

producer

  • D.)

unemployed

What happens on a graph for a good when a tax is imposed?

  • A.)

The supply curve shifts to the left.

  • B.)

The supply curve shifts to the right

  • C.)

The demand curve shifts to the left.

  • D.)

The demand curve shifts to the right.

When the government pays money to encourage production, this is known as a __________.

  • A.)

tax incidence

  • B.)

transfer payment

  • C.)

subsidy

  • D.)

revenue stream

The price for borrowing money is known as the __________.

  • A.)

exchange rate

  • B.)

interest rate

  • C.)

time deposit

  • D.)

deposit rate

The value of an item in monetary terms at a specific point in time is the __________.

  • A.)

price

  • B.)

interest rate

  • C.)

inflation

  • D.)

money supply

When prices increase over time, this is known as __________.

  • A.)

price level

  • B.)

stagflation

  • C.)

inflation

  • D.)

nominal interest rate

Jim can't find a job because the store where he was manager just closed due to a recession.

What type of unemployment does this represent?

  • A.)

Frictional

  • B.)

Natural

  • C.)

Cyclical

  • D.)

Structural

Unemployment as a result of people's skills not matching those needed for jobs in a changing economy is known as __________ unemployment.

  • A.)

frictional

  • B.)

cyclical

  • C.)

full

  • D.)

structural

Which of the following examples corresponds with frictional unemployment?

  • A.)

This type of unemployment occurs only during a recession.

  • B.)

This type of unemployment occurs when the economy changes and people with skills that were once desirable can no longer find work.

  • C.)

This type of unemployment occurs only when the economy is at a peak.

  • D.)

This type of unemployment occurs when college students graduate and look for full time work.

Which of the following is a reason why the aggregate demand curve slopes downward?

  • A.)

Balance of payments

  • B.)

Trade surplus

  • C.)

Solow growth curve

  • D.)

Interest rate effect

When a domestic currency depreciates, what happens to the purchases of imports and exports?

  • A.)

Imports decrease and exports increase.

  • B.)

Imports increase and exports decrease.

  • C.)

Imports and exports both increase.

  • D.)

Exports and imports both decrease.

Which of the following statements corresponds with the wealth effect?

  • A.)

As the price level falls, demand stays the same.

  • B.)

As the price level falls in other countries, Americans buy more goods abroad.

  • C.)

As the price of borrowing declines, purchases of durable goods (cars, houses) increase and so do investments.

  • D.)

As the price level falls, people feel as if they have more money and purchase more goods.

If the demand for a country's currency increases, what happens to the currency?

  • A.)

It will not change; money supply is fixed.

  • B.)

It will appreciate.

  • C.)

It is impossible to predict.

  • D.)

It will depreciate.

Which of the following is true regarding exchange rates?

  • A.)

It is easy to predict what the exchange rate will be.

  • B.)

The exchange rate between two currencies never changes.

  • C.)

It is subject to the stability in one country as compared to another.

  • D.)

All countries express the exchange rate in the same way.

Which of the following is true regarding exchange rates?

  • A.)

Exchange rates are stable and predictable.

  • B.)

Exchange rates are set by governments and do not change often.

  • C.)

Economics models can accurately pinpoint changes in exchange rates using economic indicators.

  • D.)

Exchange rates are influenced by the market and subject to volatility.

Select the true statement about international trade.

  • A.)

A country that has a current account trade surplus will have a currency that depreciates over time, all else equal.

  • B.)

A country with a trade surplus will have a currency that stabilizes over time, all else equal.

  • C.)

A country that has a current account trade deficit will have a currency that depreciates over time, all else equal.

  • D.)

A country with a trade deficit will have a currency that appreciates over time, all else equal.

Investment and financial activity is shown on a country's __________.

  • A.)

current account

  • B.)

trade surplus

  • C.)

capital account

  • D.)

trade deficit

When the Current Account and the Capital Account are added together, __________.

  • A.)

the sum will be negative

  • B.)

the sum will be positive

  • C.)

the sum will be zero

  • D.)

it is impossible to predict, given changes in trade patterns

 

 

Answers

(33)
Status NEW Posted 07 May 2020 04:05 AM My Price 14.00

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