ECON 200 UOFA FINAL EXAM VERSION 2 COMPLETE QUESTIONS AND DETAILED SOLUTIONS LATEST UPDATE THIS YEAR JUST RELEASED

ECON 200 UOFA FINAL EXAM VERSION 2 -
COMPLETE QUESTIONS AND DETAILED SOLUTIONS

LATEST UPDATE THIS YEAR JUST RELEASED



Question 1: The underground economy can be described as: (a)
economic production that includes mining. (b) economic activity
that is hidden from the government to avoid taxes or because the
activity is illegal. (c) production of infrastructure that spurs growth
in the rest of the economy. (d) production of intermediate goods
and services.
Answer:
economic activity that is hidden from the government to avoid taxes or
because the activity is illegal


Question 2: How is GDP measured? (a) GDP is measured by adding
the quantities of goods and services produced in a given year. (b)
GDP is measured by adding up all the intermediate sales
throughout the year. (c) GDP is measured using stock market
values, or stock prices. (d) GDP is measured by adding the prices
of final goods and services produced throughout the economy in a
given time period.
Answer:
GDP is measured by adding the prices of final goods and services
produced throughout the economy in a given time period


Question 3: Which of the following is counted in GDP? (a)
Hamburger buns bought by McDonald's for making Big Macs. (b) A
used economics textbook. (c) A pair of jeans you purchase from
Old Navy. (d) An old painting you buy at an auction.
Answer:

,a pair of jeans you purchase from old navy


Question 4: The largest component of American GDP is:
_________. (a) income (b) profits (c) investment (d) consumption
Answer:
consumption


Question 5: ___________ causes nominal GDP to rise; but
___________ causes real GDP to rise. (a) inflation, a decrease in
production (b) inflation, an increase in production (c) deflation, a
decrease in production (d) deflation, an increase in production
Answer:
inflation, an increase in production


Question 6: Suppose the relevant population (non-institutionalized,
at least age 16) of Wildcat Nation is 10,000. Of this population, 5,000
are employed, 2,000 have never worked and are not looking for
work, 2,000 are not working and are looking for work, and 1,000
have retired. (a) What is the size of the labor force in Wildcat
Nation?
Answer:
7,000


Question 7: Suppose the relevant population (non-institutionalized,
at least age 16) of Wildcat Nation is 10,000. Of this population, 5,000
are employed, 2,000 have never worked and are not looking for
work, 2,000 are not working and are looking for work, and 1,000
have retired. (b) What is the unemployment rate in Wildcat Nation?
Answer:

, : 2,000/7,000 = 28.5%


Question 8: (31) Suppose the relevant population
(non-institutionalized, at least age 16) of Wildcat Nation is 10,000.
Of this population, 5,000 are employed, 2,000 have never worked
and are not looking for work, 2,000 are not working and are looking
for work, and 1,000 have retired. (c) What is Wildcat Nations's labor
force participation rate?
Answer:
Answer: 7,000/10,000 = 70%


Question 9: (a) If the number of discouraged workers increases,
what happens to the labor force participation rate?
Answer:
Drops (fewer workers either employed or unemployed)


Question 10: (b) If the number of discouraged workers increases,
what happens to the unemployment rate?
Answer:
Drops (these people are no longer counted as unemployed)


Question 11: Suppose the relevant population
(non-institutionalized, at least age 16) of Sierra Vista, AZ is 6,000.
Of this population, 3,000 are employed, 1,000 have never worked
and are not looking for work, 1,000 are not working and are looking
for work, and 1,000 have retired. (a) What is the size of the labor
force in Sierra Vista?
Answer:
4,000