ECO 252
Exam #2 Chapters 7-10
1. The aggregate supply curve will shift to the right when the:
a. Amount of labor in the society increases
b. Capital stock of the society shrinks
c. Amount of labor in the society decreases
d. Amount of natural resources in the society gets smaller
2. As shown in exhibit 9-3, if GDP is $14 trillion, the economy
experiences unplanned inventory:
a. Accumulation of $12 trillion
b. Depletion of $14 trillion
c. Accumulation of $2 trillion
d. Depletion of $4 trillion
3. In exhibit 8-9, which of the following could cause the shift from I1 to
I2?
, a. lower money holdings
b. Expectations of a future economic slow-down
c. Lower disposable income
d. Lower interest rates
4. Which of the following is true about inflation?
a. Inflation is more damaging if it is anticipated
b. Inflation promotes social harmony by uniting people against the
government
c. Accurate anticipation of inflation is possible for everyone who is
well informed about economic events
d. Those who lend money at a rate below the rate of inflation
suffer economic losses
5. The marginal propensity to consume (MPC) is the slope of the:
a. GDP curve
b. Autonomous consumption curve
c. Consumption function
d. Disposable income curve
6. Which of the following events would produce an upward shift in the
consumption function, other things being equal?
a. An increase in the interest rate
b. An increase in consumer wealth
c. A decrease in autonomous consumption
d. A decrease in consumer wealth
7. Which of the following will increase investment spending?
a. More optimistic business expectations
b. An increase in business taxes
Exam #2 Chapters 7-10
1. The aggregate supply curve will shift to the right when the:
a. Amount of labor in the society increases
b. Capital stock of the society shrinks
c. Amount of labor in the society decreases
d. Amount of natural resources in the society gets smaller
2. As shown in exhibit 9-3, if GDP is $14 trillion, the economy
experiences unplanned inventory:
a. Accumulation of $12 trillion
b. Depletion of $14 trillion
c. Accumulation of $2 trillion
d. Depletion of $4 trillion
3. In exhibit 8-9, which of the following could cause the shift from I1 to
I2?
, a. lower money holdings
b. Expectations of a future economic slow-down
c. Lower disposable income
d. Lower interest rates
4. Which of the following is true about inflation?
a. Inflation is more damaging if it is anticipated
b. Inflation promotes social harmony by uniting people against the
government
c. Accurate anticipation of inflation is possible for everyone who is
well informed about economic events
d. Those who lend money at a rate below the rate of inflation
suffer economic losses
5. The marginal propensity to consume (MPC) is the slope of the:
a. GDP curve
b. Autonomous consumption curve
c. Consumption function
d. Disposable income curve
6. Which of the following events would produce an upward shift in the
consumption function, other things being equal?
a. An increase in the interest rate
b. An increase in consumer wealth
c. A decrease in autonomous consumption
d. A decrease in consumer wealth
7. Which of the following will increase investment spending?
a. More optimistic business expectations
b. An increase in business taxes
