MACROECONOMICS FINAL EXAM
QUIZ & VERIFIED COMPLETE
SOLUTIONS PASSED 100%
Economics is best defined as the study of:
A. How society manages its scarce resources.
B. How the government can stop the harm from unchecked self-interest.
C. How to run a business most profitably.
D. How to predict inflation, unemployment, and stock prices - CORRECT ANSWER A
Governments may intervene in a market economy in order to
A. Correct a market failure due to extremities.
B. Achieve a more equal distribution of income.
C. Protect property rights.
D. All of the above. - CORRECT ANSWER D
Which does NOT add to US GDP?
A. The city of NY pays a salary to a policeman.
B. The federal government sends a social security check to your grandmother.
C. Air France buys a plane from Boeing, the US aircraft manufacturer.
D. General Motors builds a new auto factory in North Carolina. - CORRECT ANSWER
B
You may work as an assistant coach on the university swim team and earn $15 per
hour. One day, you decide to skip the hour-long practice and to the county fair instead.
Which has an admission fee of $9. The total cost of skipping practice and going to the
fair is
A. $9
B. $15
C. $24
D. $30 - CORRECT ANSWER C
An American buys a pair of shoes made in Italy. How do the US national income
accounts treat the transaction?
A. Net exports and GDP both rise.
B. Net exports and GDP both fall.
, C. Net exports are unchanged, while GDP rises.
D. Net exports fall, while GDP is unchanged. - CORRECT ANSWER D
The CPI measures approximately the same economic phenomenon as
A. Real DGP
B. The GDP deflator
C. Nominal GDP
D. The employment rate - CORRECT ANSWER B
If the CPI is 100 in 1984 and 200 today, then $400 in 1984 has the same purchasing
power as ______________ today.
A. $800
B. $600
C. $400
D. $200 - CORRECT ANSWER A (200/100) X 400
Brian is training for a triathlon. Consider the following sentence: Brian has only 200
hours this week that he can devote to training. each hour he spends swimming is an
hour that he can't spend biking or running. Which basic principle of individual choice do
these statements best illustrate?
A. Brian has an incentive to spend more time on spending than on biking or running.
B. Brian can use time most efficiently by spending the same amounts of time on
swimming, biking, and running.
C. People usually exploit opportunities to make themselves better off.
D. People face trade-offs. - CORRECT ANSWER D
If a Tennessee gun manufacturer raises the price of rifles it sells to the U.S. Army, its
price hike will increase
A. GDP deflator but not CPI.
B. CPI but not GDP deflator.
C. Both GDP deflator and CPI.
D. Neither GDP deflator or CPI. - CORRECT ANSWER A
A marginal change is one that
A. Makes an outcome inefficient.
B. Is not important for public policy.
C. Incrementally alters an existing plan.
D. Does not influence incentives. - CORRECT ANSWER C
QUIZ & VERIFIED COMPLETE
SOLUTIONS PASSED 100%
Economics is best defined as the study of:
A. How society manages its scarce resources.
B. How the government can stop the harm from unchecked self-interest.
C. How to run a business most profitably.
D. How to predict inflation, unemployment, and stock prices - CORRECT ANSWER A
Governments may intervene in a market economy in order to
A. Correct a market failure due to extremities.
B. Achieve a more equal distribution of income.
C. Protect property rights.
D. All of the above. - CORRECT ANSWER D
Which does NOT add to US GDP?
A. The city of NY pays a salary to a policeman.
B. The federal government sends a social security check to your grandmother.
C. Air France buys a plane from Boeing, the US aircraft manufacturer.
D. General Motors builds a new auto factory in North Carolina. - CORRECT ANSWER
B
You may work as an assistant coach on the university swim team and earn $15 per
hour. One day, you decide to skip the hour-long practice and to the county fair instead.
Which has an admission fee of $9. The total cost of skipping practice and going to the
fair is
A. $9
B. $15
C. $24
D. $30 - CORRECT ANSWER C
An American buys a pair of shoes made in Italy. How do the US national income
accounts treat the transaction?
A. Net exports and GDP both rise.
B. Net exports and GDP both fall.
, C. Net exports are unchanged, while GDP rises.
D. Net exports fall, while GDP is unchanged. - CORRECT ANSWER D
The CPI measures approximately the same economic phenomenon as
A. Real DGP
B. The GDP deflator
C. Nominal GDP
D. The employment rate - CORRECT ANSWER B
If the CPI is 100 in 1984 and 200 today, then $400 in 1984 has the same purchasing
power as ______________ today.
A. $800
B. $600
C. $400
D. $200 - CORRECT ANSWER A (200/100) X 400
Brian is training for a triathlon. Consider the following sentence: Brian has only 200
hours this week that he can devote to training. each hour he spends swimming is an
hour that he can't spend biking or running. Which basic principle of individual choice do
these statements best illustrate?
A. Brian has an incentive to spend more time on spending than on biking or running.
B. Brian can use time most efficiently by spending the same amounts of time on
swimming, biking, and running.
C. People usually exploit opportunities to make themselves better off.
D. People face trade-offs. - CORRECT ANSWER D
If a Tennessee gun manufacturer raises the price of rifles it sells to the U.S. Army, its
price hike will increase
A. GDP deflator but not CPI.
B. CPI but not GDP deflator.
C. Both GDP deflator and CPI.
D. Neither GDP deflator or CPI. - CORRECT ANSWER A
A marginal change is one that
A. Makes an outcome inefficient.
B. Is not important for public policy.
C. Incrementally alters an existing plan.
D. Does not influence incentives. - CORRECT ANSWER C
