EC 2202 EXAM QUESTIONS WITH
CORRECT ANSWERS GRADED A+
When conducting an open-market purchase, the Fed
a. buys government bonds, and in so doing increases the money supply.
b. buys government bonds, and in so doing decreases the money supply.
c. sells government bonds, and in so doing increases the money supply.
d. sells government bonds, and in so doing decreases the money supply.
a. buys government bonds, and in so doing increases the money supply.
What do economists mean by the demand for money?
a. It is the amount of currency, checking account deposits and stocks and
bonds that individuals hold.
b. It is the amount of money—currency and checking account deposits-that
individuals hold
c. It is the amount of money—currency and checking account deposits—that
individuals use to pay for one transaction per day.
d. It is the monetary value of total wealth of individuals.
b. It is the amount of money—currency and checking account deposits-that
individuals hold
In the graph of the money market shown below, what could cause the money
supply curve to shift from MS1 to MS2?
a. The Fed decreases the money supply by raising interest rate.
b. Congress increases the money supply.
c. The Fed increases the money supply by deciding to purchase U.S. Treasury
securities.
, d. The Fed decreases the money supply by deciding to sell U.S. Treasury
securities.
d. The Fed decreases the money supply by deciding to sell U.S. Treasury securities.
Suppose people in the adult population in a small country are classified based
on their age.
Labor Force Status less than 55 55 and older
Number employed 400,000 100,000
Number unemployed 25,000 7,000
Number in Population 600,000 200,000
In the proper order, which age group has the highest unemployment rate and
which has the highest participation rate?
A. 55 and older, under 55
B. under 55, under 55
C. under 55, 55 and older
D. 55 and older, 55 and older
A. 55 and older, under 55
Suppose that the economy enters into a recession and that, as a result, Rusty
Z. Wrench loses his job as a delivery truck mechanic and remains
unemployed. When the economy recovers, Rusty's previous employer rehires
him. What is the best classification for his time as an unemployed truck
mechanic?
A. Cyclically unemployed
B. Frictionally unemployed
C. Seasonally unemployed
D. Structurally unemployed
A. Cyclically unemployed
Suppose that Sally J. Society recently lost her job as an underwater welder. In
looking for anew job, she discovers that the only available jobs are for
economists and that there are noopenings for underwater welders because the
trade is now obsolete. If Sally J. Society decides toreturn to school to earn an
Economics degree, what is the best classification of herunemployment status?
CORRECT ANSWERS GRADED A+
When conducting an open-market purchase, the Fed
a. buys government bonds, and in so doing increases the money supply.
b. buys government bonds, and in so doing decreases the money supply.
c. sells government bonds, and in so doing increases the money supply.
d. sells government bonds, and in so doing decreases the money supply.
a. buys government bonds, and in so doing increases the money supply.
What do economists mean by the demand for money?
a. It is the amount of currency, checking account deposits and stocks and
bonds that individuals hold.
b. It is the amount of money—currency and checking account deposits-that
individuals hold
c. It is the amount of money—currency and checking account deposits—that
individuals use to pay for one transaction per day.
d. It is the monetary value of total wealth of individuals.
b. It is the amount of money—currency and checking account deposits-that
individuals hold
In the graph of the money market shown below, what could cause the money
supply curve to shift from MS1 to MS2?
a. The Fed decreases the money supply by raising interest rate.
b. Congress increases the money supply.
c. The Fed increases the money supply by deciding to purchase U.S. Treasury
securities.
, d. The Fed decreases the money supply by deciding to sell U.S. Treasury
securities.
d. The Fed decreases the money supply by deciding to sell U.S. Treasury securities.
Suppose people in the adult population in a small country are classified based
on their age.
Labor Force Status less than 55 55 and older
Number employed 400,000 100,000
Number unemployed 25,000 7,000
Number in Population 600,000 200,000
In the proper order, which age group has the highest unemployment rate and
which has the highest participation rate?
A. 55 and older, under 55
B. under 55, under 55
C. under 55, 55 and older
D. 55 and older, 55 and older
A. 55 and older, under 55
Suppose that the economy enters into a recession and that, as a result, Rusty
Z. Wrench loses his job as a delivery truck mechanic and remains
unemployed. When the economy recovers, Rusty's previous employer rehires
him. What is the best classification for his time as an unemployed truck
mechanic?
A. Cyclically unemployed
B. Frictionally unemployed
C. Seasonally unemployed
D. Structurally unemployed
A. Cyclically unemployed
Suppose that Sally J. Society recently lost her job as an underwater welder. In
looking for anew job, she discovers that the only available jobs are for
economists and that there are noopenings for underwater welders because the
trade is now obsolete. If Sally J. Society decides toreturn to school to earn an
Economics degree, what is the best classification of herunemployment status?
