Econ 111 Practice Exam || QUESTIONS WITH
ANSWERS 100% VERIFIED!!
In 2008, the United States was in recession. Which of the following things would you not
expect to have happened?
Increased layoffs and firings
A higher rate of bankruptcy
Increased claims for unemployment insurance
Increased real GDP correct answers Increased real GDP
The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for
the slope of short-run aggregate supply.
the slope of long-run aggregate supply.
the slope of the aggregate-demand curve.
shifts in the aggregate-demand curve. correct answers the slope of the aggregate-demand
curve.
From 2001 to 2005 there was a dramatic rise in the value of houses. If this rise made
homeowners feel wealthier, then it would have shifted aggregate
demand right.
demand left.
supply right.
supply left. correct answers demand right.
When the Fed buys bonds the supply of money
increases and so aggregate demand shifts right.
decreases and so aggregate demand shifts left.
decreases and so aggregate demand shifts right.
increases and so aggregate demand shifts left. correct answers increases and so aggregate
demand shifts right.
Suppose that political instability in other countries makes people fear for the value of their
assets in these countries so that they desire to purchase more U.S assets. What would happen
to the dollar?
It would appreciate in foreign exchange markets making U.S. goods more expensive
compared to foreign goods.
It would appreciate in foreign exchange markets making U.S. goods less expensive compared
to foreign goods.
It would depreciate in foreign exchange markets making U.S. goods more expensive
compared to foreign goods.
It would depreciate in foreign exchange markets making U.S. goods less expensive compared
to foreign goods. correct answers It would appreciate in foreign exchange markets making
U.S. goods more expensive compared to foreign goods.
, Suppose that foreigners had reduced confidence in U.S. financial institutions and believed
that privately issued U.S. bonds were more likely to be defaulted on. U.S. net exports would
rise which by itself would increase aggregate demand.
rise which by itself would decrease aggregate demand.
fall which by itself would increase aggregate demand.
fall which by itself would decrease aggregate demand. correct answers rise which by itself
would increase aggregate demand.
Which of the following is not a determinant of the long-run level of real GDP?
The price level
The amount of capital used by firms
Available stock of human capital
Available technology correct answers The price level
Other things the same, if technology increases, then in the long run
both output and prices are higher.
output is higher and prices are lower.
output is lower and prices are higher.
both output and prices are lower. correct answers output is higher and prices are lower.
The sticky-price theory of the short-run aggregate supply curve says that if the price level
rises by 5% while firms were expecting it to rise by 2%, then some firms with high menu
costs will have
higher than desired prices, which leads to an increase in the aggregate quantity of goods and
services supplied.
higher than desired prices, which leads to a decrease in the aggregate quantity of goods and
services supplied.
lower than desired prices, which leads to an increase in the aggregate quantity of goods and
services supplied.
lower than desired prices, which leads to a decrease in the aggregate quantity of goods and
services supplied. correct answers lower than desired prices, which leads to an increase in the
aggregate quantity of goods and services supplied.
People had been expecting the price level to be 120 but it turns out to be 122. In response
Robinson Tire Company increases the number of workers it employs. What could explain
this?
Both sticky price theory and sticky wage theory
Sticky price theory but not sticky wage theory
Sticky wage theory but not sticky price theory
Neither sticky wage theory nor sticky price theory correct answers Both sticky price theory
and sticky wage theory
Economic expansions (boom) in Canada would cause the U.S. price level
and real GDP to rise.
ANSWERS 100% VERIFIED!!
In 2008, the United States was in recession. Which of the following things would you not
expect to have happened?
Increased layoffs and firings
A higher rate of bankruptcy
Increased claims for unemployment insurance
Increased real GDP correct answers Increased real GDP
The wealth effect, interest-rate effect, and exchange-rate effect are all explanations for
the slope of short-run aggregate supply.
the slope of long-run aggregate supply.
the slope of the aggregate-demand curve.
shifts in the aggregate-demand curve. correct answers the slope of the aggregate-demand
curve.
From 2001 to 2005 there was a dramatic rise in the value of houses. If this rise made
homeowners feel wealthier, then it would have shifted aggregate
demand right.
demand left.
supply right.
supply left. correct answers demand right.
When the Fed buys bonds the supply of money
increases and so aggregate demand shifts right.
decreases and so aggregate demand shifts left.
decreases and so aggregate demand shifts right.
increases and so aggregate demand shifts left. correct answers increases and so aggregate
demand shifts right.
Suppose that political instability in other countries makes people fear for the value of their
assets in these countries so that they desire to purchase more U.S assets. What would happen
to the dollar?
It would appreciate in foreign exchange markets making U.S. goods more expensive
compared to foreign goods.
It would appreciate in foreign exchange markets making U.S. goods less expensive compared
to foreign goods.
It would depreciate in foreign exchange markets making U.S. goods more expensive
compared to foreign goods.
It would depreciate in foreign exchange markets making U.S. goods less expensive compared
to foreign goods. correct answers It would appreciate in foreign exchange markets making
U.S. goods more expensive compared to foreign goods.
, Suppose that foreigners had reduced confidence in U.S. financial institutions and believed
that privately issued U.S. bonds were more likely to be defaulted on. U.S. net exports would
rise which by itself would increase aggregate demand.
rise which by itself would decrease aggregate demand.
fall which by itself would increase aggregate demand.
fall which by itself would decrease aggregate demand. correct answers rise which by itself
would increase aggregate demand.
Which of the following is not a determinant of the long-run level of real GDP?
The price level
The amount of capital used by firms
Available stock of human capital
Available technology correct answers The price level
Other things the same, if technology increases, then in the long run
both output and prices are higher.
output is higher and prices are lower.
output is lower and prices are higher.
both output and prices are lower. correct answers output is higher and prices are lower.
The sticky-price theory of the short-run aggregate supply curve says that if the price level
rises by 5% while firms were expecting it to rise by 2%, then some firms with high menu
costs will have
higher than desired prices, which leads to an increase in the aggregate quantity of goods and
services supplied.
higher than desired prices, which leads to a decrease in the aggregate quantity of goods and
services supplied.
lower than desired prices, which leads to an increase in the aggregate quantity of goods and
services supplied.
lower than desired prices, which leads to a decrease in the aggregate quantity of goods and
services supplied. correct answers lower than desired prices, which leads to an increase in the
aggregate quantity of goods and services supplied.
People had been expecting the price level to be 120 but it turns out to be 122. In response
Robinson Tire Company increases the number of workers it employs. What could explain
this?
Both sticky price theory and sticky wage theory
Sticky price theory but not sticky wage theory
Sticky wage theory but not sticky price theory
Neither sticky wage theory nor sticky price theory correct answers Both sticky price theory
and sticky wage theory
Economic expansions (boom) in Canada would cause the U.S. price level
and real GDP to rise.
