ECN 211 FINAL EXAM REVIEW
COMPREHENSIVE TEST 2026 QUESTIONS
WITH ANSWERS GRADED A+
◉ What type of individual is considered unemployed? Give
examples. Answer: 1. A new college graduate seeking work for the
first time.
2. A college professor who retired last year who is now seeking part-
time employment.
◉ It takes time for unemployed workers to find jobs. The type of
unemployment caused by search time is. Answer: Frictional
Unemployment
◉ The rise in unemployment caused by the economic fallout of the
corona virus will be attributed to. Answer: Cyclical Unemployment
◉ What is a negative consequence of fiat money?. Answer:
Governments may have incentive to create too much fiat money.
◉ What is NOT required for a good to function as money?. Answer: It
must have intrinsic value.
,◉ Which of the following appears under "liabilities" on a bank
balance sheet?. Answer: Checking deposits
◉ A bank is considered insolvent if. Answer: Capital (equity) is less
than or equal to zero
◉ The "headline" or U3 unemployment rate often **(1)** the actual
level of idle labor resources because **(2)**.. Answer: 1.
Underestimates
2. Discouraged workers are not considered part of the labor force.
◉ The natural rate of unemployment excludes what type of
unemployment?. Answer: Cyclical unemployment
◉ What is currently considered money in the United States? Multiple
answers.. Answer: 1. A $50 bill
2. A money market deposit
3. A checking account depoist
◉ Which sector of the economy's spending is included in investment
expenditures?. Answer: Firms
◉ The inflation rate is measured as.... Answer: The percent change in
a price index from one year to the next.
,◉ T/F: Over the past 50 years, growth in real GDP per person has
been roughly zero.. Answer: FALSE
◉ What best describes the labor force?. Answer: All civilian non-
institutionalized individuals 16 and over who are employed or
unemployed.
◉ When the unemployment rate is equal to the natural rate....
Answer: Cyclical unemployment is zero.
◉ **(1)** are suppliers of loanable funds. The quantity supplied
**(2)** when interest rates increase.. Answer: 1. Households
2. Government/Increases
◉ What does Nominal GDP measure?. Answer: 1. The value of
income generated in an economy.
2. The value of production that occurs in an economy.
3. the value of output generated in an economy
◉ What appears under "assets" on a bank balance sheet?. Answer:
Loans to households
, ◉ Suppose population demographics change such that households
spend a higher fraction of income. All else constant, national saving
**(1) and investment **(2)**.. Answer: 1. Decreases
2. Decreases
◉ What is least important for long-run growth?. Answer: Natural
resources
◉ All else constant, an increase in private saving leads to **(1)** in
interest rates and a **(2)** in investment.. Answer: 1. Decrease
2. Increase
◉ What would most likely lead to an decrease in the quantity of
capital per worker in the long-run?. Answer: A decrease in the share
of income saved by households.
◉ What would most likely lead to an increase in the quantity of
capital per worker in the long-run?. Answer: An increase in the
share of income saved by households
◉ The rise in unemployment caused by the economic fallout of the
corona virus will be attributed to. Answer: Cyclical unemployment!
COMPREHENSIVE TEST 2026 QUESTIONS
WITH ANSWERS GRADED A+
◉ What type of individual is considered unemployed? Give
examples. Answer: 1. A new college graduate seeking work for the
first time.
2. A college professor who retired last year who is now seeking part-
time employment.
◉ It takes time for unemployed workers to find jobs. The type of
unemployment caused by search time is. Answer: Frictional
Unemployment
◉ The rise in unemployment caused by the economic fallout of the
corona virus will be attributed to. Answer: Cyclical Unemployment
◉ What is a negative consequence of fiat money?. Answer:
Governments may have incentive to create too much fiat money.
◉ What is NOT required for a good to function as money?. Answer: It
must have intrinsic value.
,◉ Which of the following appears under "liabilities" on a bank
balance sheet?. Answer: Checking deposits
◉ A bank is considered insolvent if. Answer: Capital (equity) is less
than or equal to zero
◉ The "headline" or U3 unemployment rate often **(1)** the actual
level of idle labor resources because **(2)**.. Answer: 1.
Underestimates
2. Discouraged workers are not considered part of the labor force.
◉ The natural rate of unemployment excludes what type of
unemployment?. Answer: Cyclical unemployment
◉ What is currently considered money in the United States? Multiple
answers.. Answer: 1. A $50 bill
2. A money market deposit
3. A checking account depoist
◉ Which sector of the economy's spending is included in investment
expenditures?. Answer: Firms
◉ The inflation rate is measured as.... Answer: The percent change in
a price index from one year to the next.
,◉ T/F: Over the past 50 years, growth in real GDP per person has
been roughly zero.. Answer: FALSE
◉ What best describes the labor force?. Answer: All civilian non-
institutionalized individuals 16 and over who are employed or
unemployed.
◉ When the unemployment rate is equal to the natural rate....
Answer: Cyclical unemployment is zero.
◉ **(1)** are suppliers of loanable funds. The quantity supplied
**(2)** when interest rates increase.. Answer: 1. Households
2. Government/Increases
◉ What does Nominal GDP measure?. Answer: 1. The value of
income generated in an economy.
2. The value of production that occurs in an economy.
3. the value of output generated in an economy
◉ What appears under "assets" on a bank balance sheet?. Answer:
Loans to households
, ◉ Suppose population demographics change such that households
spend a higher fraction of income. All else constant, national saving
**(1) and investment **(2)**.. Answer: 1. Decreases
2. Decreases
◉ What is least important for long-run growth?. Answer: Natural
resources
◉ All else constant, an increase in private saving leads to **(1)** in
interest rates and a **(2)** in investment.. Answer: 1. Decrease
2. Increase
◉ What would most likely lead to an decrease in the quantity of
capital per worker in the long-run?. Answer: A decrease in the share
of income saved by households.
◉ What would most likely lead to an increase in the quantity of
capital per worker in the long-run?. Answer: An increase in the
share of income saved by households
◉ The rise in unemployment caused by the economic fallout of the
corona virus will be attributed to. Answer: Cyclical unemployment!
