ECO 231 Comprehensive Final Exam Review
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questions with correct detailed answers
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If |a |price |of |a |good |rises, |what |happens |to |quantity |demanded |for |that |good?
a. |the |answer |depends |on |the |supply |of |the |good
b. |it |increases
c. |it |decreases
d. |it |does |not |change |- |CORRECT |ANSWER-c
government |policy |to |reduce |unemployment |and |increase |national |output |can |be |illustrated |by |an
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a. |inward |shift |of |the |aggregate |demand |curve |caused |by |an |increase |in |government |spending
b. |outward |shift |of |the |aggregate |demand |curve |caused |by |an |increase |in |government |spending
c. |outward |shift |of |the |aggregate |supply |curve |caused |by |a |reduction |in |government |spending
d. |inward |shift |of |the |aggregate |supply |curve |caused |by |a |reduction |in |goverment |spending |-
|CORRECT |ANSWER-b
which |of |the |following |is |the |correct |way |to |describe |equilibrium |in |a |market?
a. |equilibrium |is |the |best |combination |of |price |and |quantity
b. |equilibrium |is |a |tendency, |a |state |of |perpetual |motion
c. |at |equilibrium, |quantity |demanded |equals |quantity |supplied
d. |at |equilibrium |market |forces |are |no |longer |at |work
e. |at |equilibrium, |demand |equals |supply |- |CORRECT |ANSWER-c
Melissa |purchases |shares |in |a |government |bond |mutual |fund. |Is |this |included |in |the |aggregate
|demand |component |"Investment"?
, a. |yes, |if |the |purchase |is |made |out |of |current |income
b. |no, |unless |the |funds |are |deposited |in |a |domestic |financial |institution
c. |yes, |if |it |is |a |domestic |mutual |fund
d. |no, |it |would |never |be |included |- |CORRECT |ANSWER-d
individuals |will |have |different |value |judements |about |the |appropriate |rate |of |unemployment |and |the
|appropriate |rate |of |inflation.
a. |true
b. |false |- |CORRECT |ANSWER-a
Rob |took |the |afternoon |off |from |his |job |as |a |tire |salesman |to |mow |his |lawn. |Rob |told |his |wife |that
|this |made |sense |because |he |would |be |saving |the |$50 |he |would |have |to |pay |a |lawn |service, |noting
|that |this |would |be |the |opportunity |cost |to |the |family. |Rob's |wife |disagreed. |What |did |Rob's |wife |say?
a. |the |opportunity |cost |would |be |Rob's |lost |income |from |selling |tires |that |afternoon
b. |the |opportunity |cost |would |be |Rob's |lost |income |from |selling |tires |that |afternoon |plus |the |$50
c. |the |opportunity |cost |would |be |Rob's |lost |income |from |selling |tires |that |afternoon |minus |the |$50
d. |that |Rob |just |wanted |to |take |the |afternoon |off |- |CORRECT |ANSWER-c
consumer |spending |is |an |injection |in |the |circular |flow |of |income |and |spending. |
a. |true
b. |false |- |CORRECT |ANSWER-a
an |upward |sloping |supply |curve |shows |that
a. |buyers |are |willing |to |pay |more |for |a |scarce |product
b. |buyers |are |unaffected |by |sellers' |costs |of |production
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questions with correct detailed answers
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If |a |price |of |a |good |rises, |what |happens |to |quantity |demanded |for |that |good?
a. |the |answer |depends |on |the |supply |of |the |good
b. |it |increases
c. |it |decreases
d. |it |does |not |change |- |CORRECT |ANSWER-c
government |policy |to |reduce |unemployment |and |increase |national |output |can |be |illustrated |by |an
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a. |inward |shift |of |the |aggregate |demand |curve |caused |by |an |increase |in |government |spending
b. |outward |shift |of |the |aggregate |demand |curve |caused |by |an |increase |in |government |spending
c. |outward |shift |of |the |aggregate |supply |curve |caused |by |a |reduction |in |government |spending
d. |inward |shift |of |the |aggregate |supply |curve |caused |by |a |reduction |in |goverment |spending |-
|CORRECT |ANSWER-b
which |of |the |following |is |the |correct |way |to |describe |equilibrium |in |a |market?
a. |equilibrium |is |the |best |combination |of |price |and |quantity
b. |equilibrium |is |a |tendency, |a |state |of |perpetual |motion
c. |at |equilibrium, |quantity |demanded |equals |quantity |supplied
d. |at |equilibrium |market |forces |are |no |longer |at |work
e. |at |equilibrium, |demand |equals |supply |- |CORRECT |ANSWER-c
Melissa |purchases |shares |in |a |government |bond |mutual |fund. |Is |this |included |in |the |aggregate
|demand |component |"Investment"?
, a. |yes, |if |the |purchase |is |made |out |of |current |income
b. |no, |unless |the |funds |are |deposited |in |a |domestic |financial |institution
c. |yes, |if |it |is |a |domestic |mutual |fund
d. |no, |it |would |never |be |included |- |CORRECT |ANSWER-d
individuals |will |have |different |value |judements |about |the |appropriate |rate |of |unemployment |and |the
|appropriate |rate |of |inflation.
a. |true
b. |false |- |CORRECT |ANSWER-a
Rob |took |the |afternoon |off |from |his |job |as |a |tire |salesman |to |mow |his |lawn. |Rob |told |his |wife |that
|this |made |sense |because |he |would |be |saving |the |$50 |he |would |have |to |pay |a |lawn |service, |noting
|that |this |would |be |the |opportunity |cost |to |the |family. |Rob's |wife |disagreed. |What |did |Rob's |wife |say?
a. |the |opportunity |cost |would |be |Rob's |lost |income |from |selling |tires |that |afternoon
b. |the |opportunity |cost |would |be |Rob's |lost |income |from |selling |tires |that |afternoon |plus |the |$50
c. |the |opportunity |cost |would |be |Rob's |lost |income |from |selling |tires |that |afternoon |minus |the |$50
d. |that |Rob |just |wanted |to |take |the |afternoon |off |- |CORRECT |ANSWER-c
consumer |spending |is |an |injection |in |the |circular |flow |of |income |and |spending. |
a. |true
b. |false |- |CORRECT |ANSWER-a
an |upward |sloping |supply |curve |shows |that
a. |buyers |are |willing |to |pay |more |for |a |scarce |product
b. |buyers |are |unaffected |by |sellers' |costs |of |production
