ECN 221 Final Review
1. Normative statements are prescriptive, whereas positive statements are de-
scriptive. T or F?: TRUE
Normative: How worlds should be
Postitive: How the world is
2. Exports are goods produced and sold ?: domestically; abroad
3. Calculation of GDP?: Y = C + I + G + NX
C: Consumption
I: Investment
G: Gov Spending
NX: Net exports
4. Five steps of calculating CPI?: 1. Fix the basket
2. Find the prices
3. Computing basket cost
4. Base yr/ compute
5. Inflation Rate
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, 5. GDP equals?: the market value of all final goods and services produced within a country in a given period of
time
6. Five steps of decision makings ?: 1. Trade Offs
2. Opportunity Cost
3. Rational people think at the margin
4. Incentives
7. Three steps of interaction?: 1. Trade helps everyone
2. Markets organize outcomes
3. Government improves outcomes
8. In economies, we measure the cost of something as?: What you give up to get it
-every decisions has the opportunity cost
9. Productivity is defined as the?: amount of output produces from each unit of labor
10. In the short run, if the money supply increases, which of the following is not
likely to happen?: The money increasing leading to lower inflation
11. In circular flow diagrams what do households not do?: Produce goods and services
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1. Normative statements are prescriptive, whereas positive statements are de-
scriptive. T or F?: TRUE
Normative: How worlds should be
Postitive: How the world is
2. Exports are goods produced and sold ?: domestically; abroad
3. Calculation of GDP?: Y = C + I + G + NX
C: Consumption
I: Investment
G: Gov Spending
NX: Net exports
4. Five steps of calculating CPI?: 1. Fix the basket
2. Find the prices
3. Computing basket cost
4. Base yr/ compute
5. Inflation Rate
1/3
, 5. GDP equals?: the market value of all final goods and services produced within a country in a given period of
time
6. Five steps of decision makings ?: 1. Trade Offs
2. Opportunity Cost
3. Rational people think at the margin
4. Incentives
7. Three steps of interaction?: 1. Trade helps everyone
2. Markets organize outcomes
3. Government improves outcomes
8. In economies, we measure the cost of something as?: What you give up to get it
-every decisions has the opportunity cost
9. Productivity is defined as the?: amount of output produces from each unit of labor
10. In the short run, if the money supply increases, which of the following is not
likely to happen?: The money increasing leading to lower inflation
11. In circular flow diagrams what do households not do?: Produce goods and services
2/3
