ECN211 ASU EXAM 2 ACTUAL QUESTIONS AND COMPLETE SOLUTIONS LATEST UPDATE 2026/2027 GRADED A+ .

1. Microeconomics CORRECT ANSWER the study of how individual households and firms make decisions and how they interact with one another in markets 2. Macroeconomics CORRECT ANSWER the study of the economy as a whole 3. What is the goal of macroeconomics? CORRECT ANSWER to explain changes that attect many households, firms, and markets simultaneously 4. GDP deflator CORRECT ANSWER a measure of the price level calculated as the ratio of nominal GDP to real GDP times 100 5. GDP deflator formula CORRECT ANSWER GDP deflator = (Nominal GPD / Real GDP) * 100 6. What is GDP? CORRECT ANSWER GROSS DOMESTIC PRODUCT the market value of all final goods and services produced within a country in a given period of time 7. GDP formula CORRECT ANSWER GDP = consumption + investment + gov purchases + net exports 8. What is the specific interval of time usually when measuring GDP? CORRECT ANSWER a year or quarter (3 months) 9. How doesthe government usually present GDP? CORRECT ANSWER "atanannualrate" i.e. the amount of income and expenditure during the quarter (3 moths) * 4 = figure recorded for quarterly GDP 10. What two things does GDP measure at once? CORRECT ANSWER totalincomeof everyone inthe economy 2. the total expenditure on the economy's output of goods and services *For an economy as a whole, income must = expenditure 11. How does GDP measure the value of economic activity? CORRECT ANSWER market prices 12. market prices CORRECT ANSWER measure the amount people are willing to pay for ditterent goods (i.e. if the price of an apple is twice the price of an orange, then the apple contributes twice as much to GDP as does an orange) 13. TRUE/FALSE Vegetables you grow in your garden are part of GDP CORRECT ANSWER FALSE *GDP excludes most items produced and sold illicitly, such as illegal drugs, as well as most items that are produces and consumed at home (buying vegetables at the store vs growing own garden) 14. TRUE/FALSE when international paper makes paper, which Hallmark then uses to make a greeting card, the paper is called an intermediate good and the card is called a final good CORRECT ANSWER TRUE 15. intermediate good CORRECT ANSWER *already assumed to be included in price of final good unless "final" for the moment when added to firms inventory for later use 16. final good CORRECT ANSWER *included in GDP 17. TRUE/FALSE CORRECT ANSWER GDP includes both tangible goods and intangible