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EC250 Final Exam 2025 – Principles of Economics Study Guide,
Key Concepts, and Practice Questions with Answers
Prepare for the EC250 Final Exam 2025 with a complete economics study guide, key terms, and
practice test questions with detailed answers.
Get ready for the EC250 Final Exam 2025 with this comprehensive Principles of Economics
study guide. Review essential topics such as supply and demand, market equilibrium, GDP,
inflation, fiscal and monetary policy, international trade, and economic growth. Includes
practice exam questions, graph interpretation tips, and answer explanations to strengthen
your understanding of microeconomics and macroeconomics concepts. Ideal for college
students taking EC250 or equivalent economics courses preparing for their midterm or final
exam.
• EC250 final exam 2025
• EC250 economics study guide
• EC250 final exam answers
• EC250 practice test questions
1. Which of the following is investment?
a) purchase of shares in initial public offering
b) purchase of a used printing press
c) the production of a machine
d) none of the above - ANSWER-d) none of the above
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2. An increase in depreciation
a) Raises investment as new capital does not last as long
b) Lowers investment as new capital does not last as long
c) May increase or lower investment as it makes capital more expensive
d) May increase or lower investment as it makes capital more expensive but more capital needs to be
replaced each year - ANSWER-d) May increase or lower investment as it makes capital more expensive
but more capital needs to be replaced each year
3. Investment schedule shifts to the left if
a) Expected productivity of new capital falls
b) Investors expect a recession
c) Investors expect a higher real interest rate in the future
d) All of the above. - ANSWER-d) All of the above.
4. The cost of carrying inventory is
a) i
b) r
c) i+d
d) r+d - ANSWER-d) r+d
5. John puts a down payment of 25% to buy a house. In one year, the value of the house falls by 5%. His
return on down payment is:
a) -5%
b) -10%
c) -20%
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d) -40% - ANSWER-c) -20%
Use numbers. House costs 100, John borrows 75, contributes 25. The value of the house falls by 5% so
the house is worth 95; John still owes 75 so instead of 25 he now has 20
6. The definition of investment should include:
a) Spoilage of inventory
b) Depreciation of capital
c) Purchases of shares in new companies
d) None of the above - ANSWER-d) None of the above
7. The definition of investment should include
a) Cost of your university studies
b) Spending by companies on training
c) Software
d) All of the above - ANSWER-d) All of the above
49. According to the Keynesian theory of consumption
a) Consumption does not depend on wealth
b) Consumption does not depend on future income
c) Consumption depends only on current disposable income
d) All of the above - ANSWER-d) All of the above
50. According to theory we discussed in class
a) Consumption depends on current disposable income
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b) the MPC depends on whether the change in income is temporary or permanent
c) Consumption depends on the present value of disposable future income
d) All of the above - ANSWER-d) All of the above
51. Marginal Propensity to Consume
a) increases when the nominal interest rate rises
b) depends on the nominal interest rate
c) depends on the rate of inflation
d) depends on whether the change in income is temporary or permanent - ANSWER-d) depends on
whether the change in income is temporary or permanent
52. About the utility of consumption we assume that
a) it is always increasing
b) marginal utility of consumption is positive
c) marginal utility of consumption is decreasing
d) all of the above - ANSWER-d) all of the above
53. You won a scholarship that will pay $10 000 in a year (when you finish the first term of year 3) and
another $10 000 in two years (when you finish the first term of year 4). The present value today of the
scholarship is:
a) $20 000
b) $10 000+$10 000/(1+i)
c) $10 000+$10 000/(1+r)
d) $10 000/(1+r) + $10 000/(1+r)^2 - ANSWER-d) $10 000/(1+r) + $10 000/(1+r)^2
EC250 Final Exam 2025 – Principles of Economics Study Guide,
Key Concepts, and Practice Questions with Answers
Prepare for the EC250 Final Exam 2025 with a complete economics study guide, key terms, and
practice test questions with detailed answers.
Get ready for the EC250 Final Exam 2025 with this comprehensive Principles of Economics
study guide. Review essential topics such as supply and demand, market equilibrium, GDP,
inflation, fiscal and monetary policy, international trade, and economic growth. Includes
practice exam questions, graph interpretation tips, and answer explanations to strengthen
your understanding of microeconomics and macroeconomics concepts. Ideal for college
students taking EC250 or equivalent economics courses preparing for their midterm or final
exam.
• EC250 final exam 2025
• EC250 economics study guide
• EC250 final exam answers
• EC250 practice test questions
1. Which of the following is investment?
a) purchase of shares in initial public offering
b) purchase of a used printing press
c) the production of a machine
d) none of the above - ANSWER-d) none of the above
,2|Page
2. An increase in depreciation
a) Raises investment as new capital does not last as long
b) Lowers investment as new capital does not last as long
c) May increase or lower investment as it makes capital more expensive
d) May increase or lower investment as it makes capital more expensive but more capital needs to be
replaced each year - ANSWER-d) May increase or lower investment as it makes capital more expensive
but more capital needs to be replaced each year
3. Investment schedule shifts to the left if
a) Expected productivity of new capital falls
b) Investors expect a recession
c) Investors expect a higher real interest rate in the future
d) All of the above. - ANSWER-d) All of the above.
4. The cost of carrying inventory is
a) i
b) r
c) i+d
d) r+d - ANSWER-d) r+d
5. John puts a down payment of 25% to buy a house. In one year, the value of the house falls by 5%. His
return on down payment is:
a) -5%
b) -10%
c) -20%
,3|Page
d) -40% - ANSWER-c) -20%
Use numbers. House costs 100, John borrows 75, contributes 25. The value of the house falls by 5% so
the house is worth 95; John still owes 75 so instead of 25 he now has 20
6. The definition of investment should include:
a) Spoilage of inventory
b) Depreciation of capital
c) Purchases of shares in new companies
d) None of the above - ANSWER-d) None of the above
7. The definition of investment should include
a) Cost of your university studies
b) Spending by companies on training
c) Software
d) All of the above - ANSWER-d) All of the above
49. According to the Keynesian theory of consumption
a) Consumption does not depend on wealth
b) Consumption does not depend on future income
c) Consumption depends only on current disposable income
d) All of the above - ANSWER-d) All of the above
50. According to theory we discussed in class
a) Consumption depends on current disposable income
, 4|Page
b) the MPC depends on whether the change in income is temporary or permanent
c) Consumption depends on the present value of disposable future income
d) All of the above - ANSWER-d) All of the above
51. Marginal Propensity to Consume
a) increases when the nominal interest rate rises
b) depends on the nominal interest rate
c) depends on the rate of inflation
d) depends on whether the change in income is temporary or permanent - ANSWER-d) depends on
whether the change in income is temporary or permanent
52. About the utility of consumption we assume that
a) it is always increasing
b) marginal utility of consumption is positive
c) marginal utility of consumption is decreasing
d) all of the above - ANSWER-d) all of the above
53. You won a scholarship that will pay $10 000 in a year (when you finish the first term of year 3) and
another $10 000 in two years (when you finish the first term of year 4). The present value today of the
scholarship is:
a) $20 000
b) $10 000+$10 000/(1+i)
c) $10 000+$10 000/(1+r)
d) $10 000/(1+r) + $10 000/(1+r)^2 - ANSWER-d) $10 000/(1+r) + $10 000/(1+r)^2
