ECN 211 FINAL (EXAMS 1, 2, 3) ASU
DOUGLAS
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📋 DOCUMENT OVERVIEW 69 Qs
This document covers macroeconomics, microeconomics, and economics concepts, specifically GDP, CPI,
unemployment, comparative advantage, fiscal and monetary policy, and international trade. It provides
a comprehensive review of these topics through 69 questions with correct answers and detailed
explanations, allowing students to study, review, and understand key concepts. By utilizing this
document, students can gain a deeper understanding of economics principles and strengthen their
knowledge for exam preparation.
✓ Verified Answers ✓ Exam Ready ✓ Study Guide
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EXAM QUESTIONS
QUESTION 1
Which of the following is included in GDP?
A. recreational marijuana purchased from a drug dealer by a college student?
B. Recreational marijuana purchased and consumber by a man in his attic.
C. medical marijuana purchased from a government-run pharmacy by a glaucoma patient.
D. All of the above
CORRECT ANSWER
C. medical marijuana purchased from a government-run pharmacy by a glaucoma patient.
RATIONALE: The correct answer is C because GDP (Gross Domestic Product) measures the value of goods and services
produced within a country's borders, and medical marijuana purchased from a government-run pharmacy by a
glaucoma patient involves a transaction between two businesses (the pharmacy and the government) that contributes
to the country's economic activity. This type of transaction is a form of intermediate consumption, which is an essential
component of GDP.
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, QUESTION 2
you know a candy bar cost five cents in 1962. You also know the CPI for 1962 and the CPI today.
Which of the following would you use to compute the price?
A. five cents today's CPI- five cents CPI in 1962
B.Five cents *(1962 CPI/ Today's CPI)
C. five cents * (Today's CPI/ 1962 CPI)
D. five cents * (today's CPI - 1962 CPI)/1962 CPI
CORRECT ANSWER
C. five cents * (Today's CPI/ 1962 CPI)
RATIONALE: The correct formula, "C. five cents * (Today's CPI/ 1962 CPI)", is based on the principle of purchasing
power parity, where the same amount of money buys more or less goods and services over time due to inflation. By
dividing the current CPI by the 1962 CPI, you effectively calculate the relative purchasing power of $1 in 1962 compared
to today, allowing you to accurately determine the price of the candy bar in today's dollars.
QUESTION 3
Discouraged workers are included in...
A. Frictional Unemployment
B.The number of unemployed
C. the labor force
D. none of the above
CORRECT ANSWER
D. none of the above
RATIONALE: Discouraged workers are individuals who are not actively seeking employment because they believe no
jobs are available, which separates them from frictional unemployment, where individuals are temporarily between jobs
due to a natural transition in the labor market. They are also not included in the labor force, as they are not actively
seeking work and are not considered unemployed, making "D. none of the above" the correct choice, as it is a more
accurate description of their status.
QUESTION 4
when a country has a comparative advantage in producing a certain good,
A. The country should produce just enough of that good for its own consumption.
B. the country should import that good.
C. The country's opportunity cost of that good is high relative to other countries' opportunity costs of
the same good.
D. None of the above
CORRECT ANSWER
D. None of the above
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, RATIONALE: When a country has a comparative advantage in producing a good, it means that the opportunity cost of
producing that good is lower in that country compared to other countries, allowing it to produce more of the good at a
lower cost. This implies that the country should specialize in producing that good and import other goods for which it
has a comparative disadvantage or higher opportunity cost, which is in line with choice B, making D the correct answer.
QUESTION 5
The unemployment rate is computed as the number of unemployed
A. times the labor-force participation rate, all times 100.
B. divided by the adult population, all times 100
C. divided by the number of employed, all times 100
D. Divided by the labor force, all times 100.
CORRECT ANSWER
C. divided by the number of employed, all times 100
RATIONALE: The unemployment rate measures the proportion of the labor force that is not employed, so it is logically
calculated by dividing the number of unemployed individuals by the total number of people actively seeking work, which
is the labor force. This labor force consists of both employed and unemployed individuals, making option C the correct
answer as it represents the correct divisor.
QUESTION 6
In the economy of Talikastan in 2015, exports were $500, GDP was $6400, Government Purchases
were $1700, Imports were $400, and investment was $1800. What was Talikastan's consumption in
2015?
A. $2000
B. $3800
C. $2800
D. $3000
CORRECT ANSWER
A. $2000
RATIONALE: The key concept to apply here is the National Income Accounting Identity, which states that National
Income (Y) is equal to the sum of Consumption (C), Investment (I), Government Purchases (G), and Net Exports (NX).
In Talikastan, Net Exports are calculated as Exports minus Imports, which equals $500 - $400 = $100, and when added
to the given values for Investment, Government Purchases, and GDP, Consumption is found to be $2000.
QUESTION 7
Sheri, a U.S. Citizen, works only in Germany. The value she adds to the production in Germany is
included..
A. in German GDP, but is not included in U.S. GDP
B. in U.S. GDP, but is not included in German GDP
C. in both German GDP and U.S. GDP.
D. in neither German GDP nor U.S. GDP.
CORRECT ANSWER
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DOUGLAS
65+ (2026/2027 Edition) Exam Prep Bank | 100% Correct Solutions |
Expert Rationales
100% Guarantee Pass
📋 DOCUMENT OVERVIEW 69 Qs
This document covers macroeconomics, microeconomics, and economics concepts, specifically GDP, CPI,
unemployment, comparative advantage, fiscal and monetary policy, and international trade. It provides
a comprehensive review of these topics through 69 questions with correct answers and detailed
explanations, allowing students to study, review, and understand key concepts. By utilizing this
document, students can gain a deeper understanding of economics principles and strengthen their
knowledge for exam preparation.
✓ Verified Answers ✓ Exam Ready ✓ Study Guide
Trusted by thousands of students and professionals worldwide
EXAM QUESTIONS
QUESTION 1
Which of the following is included in GDP?
A. recreational marijuana purchased from a drug dealer by a college student?
B. Recreational marijuana purchased and consumber by a man in his attic.
C. medical marijuana purchased from a government-run pharmacy by a glaucoma patient.
D. All of the above
CORRECT ANSWER
C. medical marijuana purchased from a government-run pharmacy by a glaucoma patient.
RATIONALE: The correct answer is C because GDP (Gross Domestic Product) measures the value of goods and services
produced within a country's borders, and medical marijuana purchased from a government-run pharmacy by a
glaucoma patient involves a transaction between two businesses (the pharmacy and the government) that contributes
to the country's economic activity. This type of transaction is a form of intermediate consumption, which is an essential
component of GDP.
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, QUESTION 2
you know a candy bar cost five cents in 1962. You also know the CPI for 1962 and the CPI today.
Which of the following would you use to compute the price?
A. five cents today's CPI- five cents CPI in 1962
B.Five cents *(1962 CPI/ Today's CPI)
C. five cents * (Today's CPI/ 1962 CPI)
D. five cents * (today's CPI - 1962 CPI)/1962 CPI
CORRECT ANSWER
C. five cents * (Today's CPI/ 1962 CPI)
RATIONALE: The correct formula, "C. five cents * (Today's CPI/ 1962 CPI)", is based on the principle of purchasing
power parity, where the same amount of money buys more or less goods and services over time due to inflation. By
dividing the current CPI by the 1962 CPI, you effectively calculate the relative purchasing power of $1 in 1962 compared
to today, allowing you to accurately determine the price of the candy bar in today's dollars.
QUESTION 3
Discouraged workers are included in...
A. Frictional Unemployment
B.The number of unemployed
C. the labor force
D. none of the above
CORRECT ANSWER
D. none of the above
RATIONALE: Discouraged workers are individuals who are not actively seeking employment because they believe no
jobs are available, which separates them from frictional unemployment, where individuals are temporarily between jobs
due to a natural transition in the labor market. They are also not included in the labor force, as they are not actively
seeking work and are not considered unemployed, making "D. none of the above" the correct choice, as it is a more
accurate description of their status.
QUESTION 4
when a country has a comparative advantage in producing a certain good,
A. The country should produce just enough of that good for its own consumption.
B. the country should import that good.
C. The country's opportunity cost of that good is high relative to other countries' opportunity costs of
the same good.
D. None of the above
CORRECT ANSWER
D. None of the above
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, RATIONALE: When a country has a comparative advantage in producing a good, it means that the opportunity cost of
producing that good is lower in that country compared to other countries, allowing it to produce more of the good at a
lower cost. This implies that the country should specialize in producing that good and import other goods for which it
has a comparative disadvantage or higher opportunity cost, which is in line with choice B, making D the correct answer.
QUESTION 5
The unemployment rate is computed as the number of unemployed
A. times the labor-force participation rate, all times 100.
B. divided by the adult population, all times 100
C. divided by the number of employed, all times 100
D. Divided by the labor force, all times 100.
CORRECT ANSWER
C. divided by the number of employed, all times 100
RATIONALE: The unemployment rate measures the proportion of the labor force that is not employed, so it is logically
calculated by dividing the number of unemployed individuals by the total number of people actively seeking work, which
is the labor force. This labor force consists of both employed and unemployed individuals, making option C the correct
answer as it represents the correct divisor.
QUESTION 6
In the economy of Talikastan in 2015, exports were $500, GDP was $6400, Government Purchases
were $1700, Imports were $400, and investment was $1800. What was Talikastan's consumption in
2015?
A. $2000
B. $3800
C. $2800
D. $3000
CORRECT ANSWER
A. $2000
RATIONALE: The key concept to apply here is the National Income Accounting Identity, which states that National
Income (Y) is equal to the sum of Consumption (C), Investment (I), Government Purchases (G), and Net Exports (NX).
In Talikastan, Net Exports are calculated as Exports minus Imports, which equals $500 - $400 = $100, and when added
to the given values for Investment, Government Purchases, and GDP, Consumption is found to be $2000.
QUESTION 7
Sheri, a U.S. Citizen, works only in Germany. The value she adds to the production in Germany is
included..
A. in German GDP, but is not included in U.S. GDP
B. in U.S. GDP, but is not included in German GDP
C. in both German GDP and U.S. GDP.
D. in neither German GDP nor U.S. GDP.
CORRECT ANSWER
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