ASU ECON 211 COMPREHENSIVE STUDY
GUIDE FULL QUESTIONS WITH ACCURATE
SOLUTIONS
●● Total Output in an economy increases when each person specializes
because
Answer: Each person spends more time producing that product in which
he or she has a comparative advantage
●● The producer that requires a smaller quantity of inputs to produce a
certain amount of a good, relative to the quantities of inputs required by
other producers to produce the same amount of that good
Answer: Has an absolute advantage in the production of that good
●● The quantity demanded of a good is the amount that buyers are
Answer: Willing and able to purchase
●● The market demand curve
Answer: Represents the sum of the quantities demanded by all the
buyers at each price of the good.
●● The quantity supplied of a good is
Answer: The amount sellers are willing and able to produce
,●● What causes equilibrium price to fall
Answer: Demand increase and Supply decrease
Demand and supply both decrease
Demand decrease and Supply increase
Demand and supply both increase
Demand decrease and supply increase
●● GDP is defined by
Answer: Value of all final goods and services produced within a country
in a given period of time
●● Changes in nominal GDP reflect
Answer: Both changes in price and the amount being produced
●● The unemployment rate is computed as the number of unemployed
Answer: Divided by the labor force all times 100
●● Some persons are counted as out of the labor force because they have
made no serious attempt to find work. However some of these
individuals may want to work even though they are too discouraged to
,make a serious effort to look. If these individuals were counted as
unemployed instead of out of the labor force, then
Answer: Both unemployment rate and the labor- force participation rate
would be higher
●● The CPI is used to
Answer: Monitor changes in the cost of living over time
●● Which of the following statements about real and nominal interest
rates is correct
Answer: When the inflation rate is positive, the nominal interest rate is
necessarily greater than the real interest rate
●● Sue was an accountant in 1944 and earned 12,000 That year
Her son Josh earns 210,000 in 2013
The Price index in 1944 was 17.6 and 218.4 in 2013
Sue's income amounts to what percentage of josh's
Answer: 70.9
●● During a certain year, the CPI increased from 120 to 132 and the
purchasing power of a bank account increased by 4% For that year
Answer: Nominal interest rate was 14 %
, ●● Productivity is defined as the quantity of
Answer: Goods and services produced from each unit of labor output
●● All else equal, If there are diminishing returns, then which of the
following is true if a country increases its capital by one unit
Answer: Output will rise but by less than it did when the previous unit
was added
●● A Bond buyer is
Answer: Saver. Long term bonds have more risk than short term bonds
●● The source of the supply of loanable funds
Answer: Is saving and the source of demand for loanable funds is
investment
●● Economist equate money with
Answer: Assets people use regularly to buy goods and services
●● Dollar bills, Paintings and emerald necklaces are
Answer: Stores of value
●● An Open market purchase
GUIDE FULL QUESTIONS WITH ACCURATE
SOLUTIONS
●● Total Output in an economy increases when each person specializes
because
Answer: Each person spends more time producing that product in which
he or she has a comparative advantage
●● The producer that requires a smaller quantity of inputs to produce a
certain amount of a good, relative to the quantities of inputs required by
other producers to produce the same amount of that good
Answer: Has an absolute advantage in the production of that good
●● The quantity demanded of a good is the amount that buyers are
Answer: Willing and able to purchase
●● The market demand curve
Answer: Represents the sum of the quantities demanded by all the
buyers at each price of the good.
●● The quantity supplied of a good is
Answer: The amount sellers are willing and able to produce
,●● What causes equilibrium price to fall
Answer: Demand increase and Supply decrease
Demand and supply both decrease
Demand decrease and Supply increase
Demand and supply both increase
Demand decrease and supply increase
●● GDP is defined by
Answer: Value of all final goods and services produced within a country
in a given period of time
●● Changes in nominal GDP reflect
Answer: Both changes in price and the amount being produced
●● The unemployment rate is computed as the number of unemployed
Answer: Divided by the labor force all times 100
●● Some persons are counted as out of the labor force because they have
made no serious attempt to find work. However some of these
individuals may want to work even though they are too discouraged to
,make a serious effort to look. If these individuals were counted as
unemployed instead of out of the labor force, then
Answer: Both unemployment rate and the labor- force participation rate
would be higher
●● The CPI is used to
Answer: Monitor changes in the cost of living over time
●● Which of the following statements about real and nominal interest
rates is correct
Answer: When the inflation rate is positive, the nominal interest rate is
necessarily greater than the real interest rate
●● Sue was an accountant in 1944 and earned 12,000 That year
Her son Josh earns 210,000 in 2013
The Price index in 1944 was 17.6 and 218.4 in 2013
Sue's income amounts to what percentage of josh's
Answer: 70.9
●● During a certain year, the CPI increased from 120 to 132 and the
purchasing power of a bank account increased by 4% For that year
Answer: Nominal interest rate was 14 %
, ●● Productivity is defined as the quantity of
Answer: Goods and services produced from each unit of labor output
●● All else equal, If there are diminishing returns, then which of the
following is true if a country increases its capital by one unit
Answer: Output will rise but by less than it did when the previous unit
was added
●● A Bond buyer is
Answer: Saver. Long term bonds have more risk than short term bonds
●● The source of the supply of loanable funds
Answer: Is saving and the source of demand for loanable funds is
investment
●● Economist equate money with
Answer: Assets people use regularly to buy goods and services
●● Dollar bills, Paintings and emerald necklaces are
Answer: Stores of value
●● An Open market purchase
