Final Exam

A  Creative Destruction

B  Scarcity

C  Security

D  Health

A  a producer surplus of $ 9 and Nathan experiences a consumer surplus of $ 3

B  a consumer surplus of $ 9 and Nathan experiences a producer surplus of $3

C  a producer surplus of $ 12 and Nathan experiences a producer surplus of $12

D  a consumer surplus of $12 and Nathan experiences a producer surplus of $3

A  If I buy a pizza, I will not be able to afford a movie.

B  The land a Kansas farmer plants in wheat is not available for corn production. 

C  A growing economy can produce more consumer goods and more capital goods at the same time.

D  The production of more military goods means fewer resources are available for civilian goods.

A  When price of paper increases, supply for paperback books will increase

B  When a study finds fish is healthy for consumers, the demand curve for fish shifts to the left.

C  When government gives Lipton Tea a subsidy, the supply of tea will increase

D  When corn prices increase, farmers will increase supply of  wheat

A  Recognition lag

B  Operational lag

C  Administrative lag

D  All of the above are characteristic of monetary policy.

A  The rate that one bank charges to another for loans, sometimes just held overnight.

B  The rate that the federal government pays on the bonds it sells to the public.

C  The rate that the federal government requires banks to charge to retail customers.

D  The rate that the bank pays to the federal government for money it borrows from the Fed

A  Consumers would buy more cars, houses and other “big ticket” items that are usually bought “on time,” thus shifting the AD curve to the right.

B  Business would contract operations because they become less profitable (ceteris paribus), thus shifting the AS curve to the left.

C  Businesses would purchase more capital goods because their net rate of return on investment would increase, thus shifting the AD curve to the left.

D  All of the above.

A  Labor.

B  Capital.

C  Land.

D  Entrepreneur.

A  Raising the Discount Rate

B  Buying bonds in the open market.

C  Raising the reserve requirement.

D  All of the above are intended to fight recession.

A  Vegetables bought by a restaurant owner from a wholesale food distributor.

B  Paint purchased by Toyota to paint their new fleets.

C   Jet fuel bought by American airlines to power its fleet of airplanes

D   A PGCC student buys a new Economics textbook.

A  Lowering taxes

B  Selling bonds

C  Printing money

D  Raising taxes

A  Crowding out

B  A recognition lag

C  An operational lag

D  An administrative lag

A  16.70%

B  83.30%

C  10.00%

D  20%

A  Development of a new fertilizer for corn

B  A global health pandemic

C  An increase in the US labor force

D  Discovery of new oil deposits in Texas

A  Opportunity cost of 1 ton of rice is Scoob is 3 tons of wheat.

B  Opportunity cost of 1 ton of wheat in Scoob is 0.33 tons of rice

C  Opportunity cost of 1 ton of rice in Widgland is 0.5 wheat.

D  Opportunity cost of 1 ton of wheat in Widgland is 0.5 of rice

A  Luigi, a foreign investor in New York, produces  furniture worth $ 200,000 in 2019

B  Paul paid rent of $12,000 for his apartment in Maryland, in 2019

C  Boeing (a company based in Chicago)  sells 10 airplanes to Norway

D  William purchases 100 shares of Amazon stock.

A  If the price ceiling is set at $ 15 there will be a surplus of Widgets in the market

B  If the government sets a price floor for widgets at $ 15 the intervention will have no effect on the market

C  If the government sets the price floor for widgets at $ 25 price there will be surplus of widgets

D  None of the above

A  M2 money supply increased

B  M2 money supply decreased 

C  M2 was unaffected

D  M1 money supply increased

A   Increase by exactly  $ 10 billion

B  Increase by more than $ 10 billion

C  Decrease by exactly $ 10 billion

D  Decrease by more than $ 10 billion

A  There was contractionary fiscal policy in 2019

B  There was inflation in 2019

C  There was a budget deficit in 2019

D  There was a budget surplus in 2019

A  John is a banker on a fixed income, this means he will not be affected by high  inflation rates

B  When oil prices increase due to war in the gulf this will cause demand pull inflation

C  If Jane gets a wage increase of 4% but inflation is 5%, her real income decreases

D  None of the above

A  Pollution by a coal mining plant causes a farmer to spend more money on fertilizer to improve his crop

B  A hurricane destroys a production plant causing the owner of the plant to spend more money rebuilding

C   Smoking harms the health of the smoker

D  Increase in the price of sugar raises the price paid by consumers of  soda, thereby disadvantaging these consumers

A  The rise in price level in the US reduces US net exports

B  If the dollar depreciated relative  the Euro, US goods will be cheaper for people in Europe

C  Higher retaliatory tariffs, by China, will discourage Chinese consumption of our exports and that will hurt  employment in the US

D  When the dollar appreciates net exports rise.

A  Add $ 4 trillion to $24 trillion because imports are used as inputs in the production of other goods in the US

B  Subtract $4 trillion from $24 trillion because imports are not part of US domestic output

C  Ignore the $ 4 trillion because exports have already been included in the $ 24 trillion

D  None of the above

A  Raising the reserve requirement

B  Purchasing bonds from commercial banks

C  Raising the discount rate

D  None of the above

A  Price of steel used to produce widgets increases due to the U.S. government placing tariffs on imports from China

B  A decrease in the price of dingbats which are complements to widgets

C  The government raises taxes on firms that manufacture widgets

D  A recession that causes incomes to decrease

A  Reduce taxes and government spending

B  Increase taxes and government  spending

C  Increase government spending and decrease taxes

D  None of the above

A  A number of toy stores in a small city shut down due to stiff competition from Amazon

B  Kamau is selling a bike worth $1,200  but due to the high demand in the market he sells  it for $2,000.

C  Suarez owns a small tech company but the tech market is doing badly and he fails to make any profits  

D  Olu just bought a used car, but 2 days later the ignition will not start  yet the seller had told him her car was in great condition

A  Structural unemployment

B  Disguised unemployment

C  Cyclical unemployment

D  Frictional unemployment

A  In a market economy, decisions are based on supply and demand

B  In a command economy, decisions are based on custom

C  In a market economy, decisions are based on central government

D  In a command economy, decisions are based on supply and demand

A  Senate committee on banking and finance

B   US Treasury

C  Congress

D  Federal Reserve System