ECO 315 CHAPTER 1 ECONOMICS DETAILED SET EXAM 2026

ECO 315 CHAPTER 1 ECONOMICS DETAILED SET EXAM 2026 The Gross Domestic Product is based on _______ whereas the Gross National Product (GNP) is based on ______. - ANSWER-the location of production; the ownership of factors of production Your friend works in the snow removal business in winter and he finds himself unemployed during spring. This is an example of _______. - ANSWER-seasonal Many retail stores hire sales assistants during the Chrismas season. However, soon thereafter in January, they lay off these people, creating the problem of _______ unemployment. - ANSWER-seasonal If a Japanese company produces and sells $1 million of cars in the U.S., it would be included in _______ of the U.S. - ANSWER-GDP Weak U.S. dollar against Chinese yuan favors _______ . - ANSWER-Chinese importers and US exporters Fear of a major recession causes stock prices to fall, everything else held constant, which in turn causes consumer spending to - ANSWER-decrease A key factor in producing high economic growth is - ANSWER-well-functioning financial markets In a recession, due to a large number of discouraged workers, the true unemployment rate may be _____ the official unemployment rate published by the government. - ANSWER-higher than The most comprehensive measure of aggregate output is - ANSWER-GDP When prices are measured in terms of fixed (base-year) prices they are called ________ prices. - ANSWER-real The measure of the aggregate price level that is most frequently reported in the media is the - ANSWER-CPI ECO 315 ECO 315 Which of the following is a TRUE statement? - ANSWER-The average price of goods and services in an economy is called the aggregate price level. ________ policy involves decisions about government spending and taxation. - ANSWER-Fiscal Which of the following is most often used in labor union contracts to adjust annual salaries or other compensations? - ANSWER-CPI Deflation is an opposite concept of ______. - ANSWER-inflation According to Professor Choi, the reason why it is difficult to cure an economic illness such as a cool-down or a recession is because there are time lags. Which of the following describes the time lag that is associated with implementing a policy? - ANSWER-administrative lag The measure of national output currently used in the U.S. is _______. - ANSWER-GDP Trade surplus exists when exports are _______ imports and trade deficit exists when imports are _______ exports. - ANSWER-larger than; larger than Professor Choi describes and analyzes the overall health of an economy by identifying such markets as _____? - ANSWER-The labor market The product market The financial market The foreign market If the labor force has 200 million people and 5 million people are unemployed, the unemployment rate is cauclated as _____. - ANSWER-2.5% Strong U.S. dollar against Chinese yuan favors _______ . - ANSWER-the US importers; the US consumers; Chinese exporters Trade deficit exists when exports are _______ imports. - ANSWER-smaller than If a young person of 15 years of age is very eager to work for pay, this individual is considered to be ______. - ANSWER-not in the labor force If a quarterly inflation rate, as measured by the consumer price index, is 2%, its annualized inflation rate is ______. - ANSWER-8% If your friend is not looking for a job because she wishes to travel the world, she is _____. - ANSWER-not in the labor force at all Total national output of the U.S. is measured by ______ which is based on the concept of the ______ of production. - ANSWER-GDP; location ECO 315 ECO 315 Which of the following can be used to measure inflation in a given economy? - ANSWER-CPI (Consumer Price Index) PPI (Producer Price Index) GDP deflator An inflation rate can measured by the change in ____________. - ANSWER-CPI (Consumer Price Index) PPI (Producer Price Index) GDP deflator Stocks represent the value of ______ whereas bonds represents the value of _____. - ANSWER-equity; debt The fiscal policy is formulated by the _______ and known as the _______