BAM 223 unit 4 - 25 mcq's with 1 written question:

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(table diagrams is attached)

 

1)   Refer to Table 13-1.  Calculate the average annual growth rate from 2002 to 2005.
a.   3% b.   1% c.   2% d.   1.5% 
2)   What two factors are the keys to determining labor productivity?
a.   the average level of education of the workforce and the price level b.   the business cycle and the growth rate of real GDP c.   technology and the quantity of capital per hour worked d.   the growth rate of real GDP and the interest rate 
3)   Long-run economic growth requires all of the following except
a.   technological change. b.   government provision of secure property rights. c.   increases in capital per hour worked. d.   political instability. 
4)   Which of the following is most liquid?
a.   a dollar bill b.   a government bond c.   a corporate bond d.   a mutual fund share
5)   Financial securities that represent promises to repay a fixed amount of funds are      known as  a.   stocks.  b.   insurance premiums. c.   pension funds. d.   bonds.

6)   In a closed economy, public saving is equal to which of the following?  (Y = GDP, C =      Consumption, G = Government purchases, T = Taxes, and TR = Transfers)
a.   Y - C - T b.   Y - C - T + TR c.   Y - G - T d.   T - G - TR  
Scenario 13-1
Consider the following data for a closed economy:
     Y = $12 trillion     C = $8 trillion     I= $4 trillion     TR = $2 trillion     T = $3 trillion
7)   Refer to Scenario 13-1.  Based on the information above, what is the level of public      saving?
a.   $2 trillion b.   $0 c.   $1 trillion d.   negative $1 trillion (a deficit of $1 trillion) 
8)   What is investment in a closed economy if you have the following economic data?      Y = $10 trillion      C = $5 trillion      TR = $2 trillion      G = $2 trillion
a.   $5 trillion b.   $2 trillion c.   $3 trillion d.   cannot be determined without information on taxes (T) 
9)   If Ebenezer Scrooge spends rather than saves his vast wealth he will
a.   promote economic growth because he is increasing the amount of funds available for      investment. b.   slow economic growth because he is reducing the amount of funds available for in      vestment. c.   slow economic growth because he is increasing the amount of funds available for      investment. d.   promote economic growth because he is decreasing the amount of funds available for      investment.

10) Refer to Figure 13-1.  Which of the following is consistent with the graph depicted      above? 
a.   Technological change increases the profitability of new investment. b.   The government runs a budget surplus. c.   Households become spendthrifts and begin to save less. d.   An expected recession decreases the profitability of new investment. 
11) Which of the following would encourage economic growth through increases in the      capital stock?
a.   an increase in household savings b.   a change from an income tax to a consumption tax c.   a decrease in the government deficit d.   all of the above 
12) During the expansion phase of the business cycle, which of the following eventually      increases?
a.   employment b.   income c.   production d.   all of the above 
13) From 1991 until 2001 the United States was in a period of
a.   business cycle peaks.b.   business cycle troughs. c.   expansion. d.   recession. 
14) As the economy nears the end of a recession, which of the following do we typically      see?
a.   increased spending on capital goods by firms b.   increasing interest rates c.   further decreases in consumer spending d.   all of the above 
15) When the economy enters a recessionary phase of the business cycle, unemployment      tends to
a.    increase. b.   decrease. c.   be unchanged. d.   change in the same direction as the rate of inflation.
16) Since 1950, expansions in the United States have become ________, while reces      sions have become ________.
a.   shorter; longer b.   longer; shorter c.   shorter; shorter d.   longer; longer 
17) The aggregate demand curve shows the relationship between the ________ and       ________.
a.   real interest rate: quantity of real GDP supplied b.   nominal interest rate; quantity of real GDP demanded c.   inflation rate; quantity of real GDP demanded d.   price level; quantity of real GDP demanded 
18) Which of the following best describes the “wealth effect”?
a.   When the price level falls, the nominal value of household wealth rises. b.   When the price level falls, the real value of household wealth rises. c.   When the price level falls, the real value of household wealth falls. d.   When the price level falls, the nominal value of household wealth falls. 

19) Potential GDP is also referred to as
a.   politico-economic GDP. b.   balanced-budget GDP. c.   full-employment GDP. d.   realized GDP. 
20) The short-run aggregate supply curve has a 
a.   negative slope. b.   slope equal to zero. c.   slope equal to infinity. d.   positive slope. 
21) If workers leave a country to seek out better opportunities in another country, then      this will 
a.   shift the short-run aggregate supply curve of the original country to the right. b.   shift the short-run aggregate supply curve of the original country to the left. c.   move the original economy down along a stationary short-run aggregate supply curve. d.   move the original economy up along a stationary short-run aggregate supply curve. 
22) Workers expect inflation to rise from 3% to 5% next year.  As a result this should 
a.   move the economy up along a stationary short-run aggregate supply curve. b.   move the economy down along a stationary short-run aggregate supply curve. c.   shift the short-run aggregate supply curve to the right. d.   shift the short-run aggregate supply curve to the left. 
23) Which of the following correctly describes the automatic mechanism through which      the economy adjusts to long-run equilibrium? 
a.   the leftward shift in short-run aggregate supply that occurs after a recession b.   the rightward shift in short-run aggregate supply that occurs after a recession c.   the rightward shift in aggregate demand that occurs after a recession d.   the leftward shift in aggregate demand that occurs after a recession 
24) Suppose the economy is at full employment and firms become more optimistic about      the future profitability of new investment.  Which of the following will happen in the      short run?
a.   Aggregate demand will shift to the left. b.   Output will decline. c.   Unemployment will decline. d.   Prices will decline.

25) Which of the following can explain why there is an increase in potential GDP but the      equilibrium level of GDP does not rise?
a.   AD shifted to the right by less than SRAS. b.   SRAS shifted to the right by more than LRAS. c.   SRAS and AD do not shift. d.   AD shifted to the right by more than SRAS.

 

Written Assignment for Unit Four
• Include your name, student number, course number, course title and unit number on each page of your written assignment (this is for your protection in case your materials become separated). • Begin each written assignment by identifying the question number you are answering followed by the actual question itself (in bold type). • Use a standard essay format for responses to all questions (i.e. an introduction, middle paragraphs and conclusion). • Responses must be submitted as a MS Word Document only, typed double-spaced, using a standard font (i.e. Times New Roman) and 12 point type size.
Word count is NOT one of the criteria that is used in assigning points to written assignments. However, students who are successful in earning the maximum number of points tend to submit written assignments that fall in the following ranges:
Undergraduate courses: 350 - 500 words or 1 - 2 pages.
Plagiarism All work must be free of any form of plagiarism. Put written answers into your own words. Do not simply cut and paste your answers from the Internet and do not copy your answers from the textbook. Be sure to refer to the course Syllabus for more details on plagiarism and proper citation styles.
Please answer ONE of the following:
1)   How has economist Robert Fogel explained that economic growth is connected to life      expectancy?  Based on this connection, in what country would you expect to have a       longer life expectancy, the United States or India?  Explain.
2)   How have government policies and programs affected the volatility of the business      cycle in the United States since 1950?  Explain and provide at least two specific      examples of policies or programs that may have had an impact.
3)   What is “human capital,” and how does human capital affect labor productivity and      economic growth?

 

 

 

 

 

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