ECN 102 FINAL EXAM questions well
answered A+ rated passed
In 2019, Americans purchased $1 trillion worth of foreign assets and foreigners purchased $2
trillion worth of American assets. What was net capital outflow? - correct answer ✔✔-1 trillion
NCO = purchase of forge in assets by domestic - purchase of domestic assets by forge in
NCO = 1 - 2 = -1
If people have rational expectations, a tight monetary policy, announced but not believed to be
credible by households and firms, would - correct answer ✔✔reduce inflation with a relatively
large increase in unemployment
When more american students choose to go on spring break in Mexico instead of Florida -
correct answer ✔✔US net exports fall and the US trade deficit becomes further from balanced
trade
A person who retires early is still included in measures of the labor force. T/F - correct answer
✔✔False
labor force= Labor force = # employed + # unemployed
not in labor force = full-time students, homemakers, retirees
Which of the following explains why the short-run aggregate supply curve slopes up? - correct
answer ✔✔misperceptions
sticky prices
sticky wages
,The short-run aggregate supply captures how all of the firms in an economy respond to price
stickiness. When prices are sticky, the SRAS curve will slope upward. The SRAS curve shows that
a higher price level leads to more output.
Which of the following would be included in GDP? - correct answer ✔✔GDP (expenditures,
income, production)
Y = C + I + G + NX
not: social security payments, distribution of wealth, or enviromemtal conditions
Most countries around the world - correct answer ✔✔do not have a similar standard of living,
but tend to be much richer than the past
Assume the economy only produces basketballs. There is a money supply of $1000. The
economy produces 50 basketballs that sell for $40 each. What is nominal GDP and money
velocity? - correct answer ✔✔Nominal GDP = $2000, velocity = 2
nominal gdp = 50 x 40
money velocity = nominal gdp /money supply
From the latest data, there are 6.5 million unemployed Americans and the size of the labor
force is 160 million. What is the current unemployment rate? - correct answer ✔✔4%
Unemployment rate = # unemployed / labor force x 100
An example of expansionary monetary policy is raising interest rates. T/F - correct answer
✔✔false
, expansionary monetary policy is:
Decreasing the discount rate.
Purchasing government securities.
Reducing the reserve requirement.
The long-run aggregate supply curve is inelastic. Which of the following would raise real GDP in
the long-run? - correct answer ✔✔an increase in society's technological knowledge, but not an
increase in the money supply
Real GDP takes inflation in account
Consider a the loanable funds market in equilibrium, we would expect the introduction of a law
reducing taxes on savings contributions to retirement accounts to - correct answer ✔✔decrease
the equilibrium interest rate and increase the quantity of investment
capital flight: Real exchange rate fall and Real interest rate increases
flight to safety: Real exchange rate increases and Real interest rate falls
Suppose the marginal propensity to consume is 0.75. If the government believes aggregate
demand is $600 billion below potential and any increase in government spending will result in
$200 billion in crowding out, how much does the government need to increase spending to
have aggregate demand reach potential? - correct answer ✔✔200 billion
A trade surplus exists when exports exceed imports, leading to negative net capital outflows. T/F
- correct answer ✔✔false
answered A+ rated passed
In 2019, Americans purchased $1 trillion worth of foreign assets and foreigners purchased $2
trillion worth of American assets. What was net capital outflow? - correct answer ✔✔-1 trillion
NCO = purchase of forge in assets by domestic - purchase of domestic assets by forge in
NCO = 1 - 2 = -1
If people have rational expectations, a tight monetary policy, announced but not believed to be
credible by households and firms, would - correct answer ✔✔reduce inflation with a relatively
large increase in unemployment
When more american students choose to go on spring break in Mexico instead of Florida -
correct answer ✔✔US net exports fall and the US trade deficit becomes further from balanced
trade
A person who retires early is still included in measures of the labor force. T/F - correct answer
✔✔False
labor force= Labor force = # employed + # unemployed
not in labor force = full-time students, homemakers, retirees
Which of the following explains why the short-run aggregate supply curve slopes up? - correct
answer ✔✔misperceptions
sticky prices
sticky wages
,The short-run aggregate supply captures how all of the firms in an economy respond to price
stickiness. When prices are sticky, the SRAS curve will slope upward. The SRAS curve shows that
a higher price level leads to more output.
Which of the following would be included in GDP? - correct answer ✔✔GDP (expenditures,
income, production)
Y = C + I + G + NX
not: social security payments, distribution of wealth, or enviromemtal conditions
Most countries around the world - correct answer ✔✔do not have a similar standard of living,
but tend to be much richer than the past
Assume the economy only produces basketballs. There is a money supply of $1000. The
economy produces 50 basketballs that sell for $40 each. What is nominal GDP and money
velocity? - correct answer ✔✔Nominal GDP = $2000, velocity = 2
nominal gdp = 50 x 40
money velocity = nominal gdp /money supply
From the latest data, there are 6.5 million unemployed Americans and the size of the labor
force is 160 million. What is the current unemployment rate? - correct answer ✔✔4%
Unemployment rate = # unemployed / labor force x 100
An example of expansionary monetary policy is raising interest rates. T/F - correct answer
✔✔false
, expansionary monetary policy is:
Decreasing the discount rate.
Purchasing government securities.
Reducing the reserve requirement.
The long-run aggregate supply curve is inelastic. Which of the following would raise real GDP in
the long-run? - correct answer ✔✔an increase in society's technological knowledge, but not an
increase in the money supply
Real GDP takes inflation in account
Consider a the loanable funds market in equilibrium, we would expect the introduction of a law
reducing taxes on savings contributions to retirement accounts to - correct answer ✔✔decrease
the equilibrium interest rate and increase the quantity of investment
capital flight: Real exchange rate fall and Real interest rate increases
flight to safety: Real exchange rate increases and Real interest rate falls
Suppose the marginal propensity to consume is 0.75. If the government believes aggregate
demand is $600 billion below potential and any increase in government spending will result in
$200 billion in crowding out, how much does the government need to increase spending to
have aggregate demand reach potential? - correct answer ✔✔200 billion
A trade surplus exists when exports exceed imports, leading to negative net capital outflows. T/F
- correct answer ✔✔false
