Final Exam

A  Scarcity

B  Security

C  Health

D  Creative Destruction

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

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

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

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

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

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

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

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

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

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

A  Administrative lag

B  Recognition lag

C  Operational 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 requires banks to charge to retail customers.

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

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

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

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

C  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.

D  All of the above.

A  Entrepreneur.

B  Labor.

C  Capital.

D  Land.

A  Buying bonds in the open market.

B  Raising the reserve requirement.

C  Raising the Discount Rate

D  All of the above are intended to fight recession.

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

B   A PGCC student buys a new Economics textbook.

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

D  Paint purchased by Toyota to paint their new fleets.

A  Selling bonds

B  Printing money

C  Raising taxes

D  Lowering taxes

A  Crowding out

B  An administrative lag

C  A recognition lag

D  An operational lag

A  10.00%

B  20%

C  16.70%

D  83.30%

A  An increase in the US labor force

B  A global health pandemic

C  Discovery of new oil deposits in Texas

D  Development of a new fertilizer for corn

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

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

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

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

A  William purchases 100 shares of Amazon stock.

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

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

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

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  M1 money supply increased

B  M2 money supply decreased 

C  M2 money supply increased

D  M2 was unaffected

A  Decrease by exactly $ 10 billion

B  Decrease by more than $ 10 billion

C   Increase by exactly  $ 10 billion

D  Increase by more than $ 10 billion

A  There was a budget deficit in 2019

B  There was contractionary fiscal policy in 2019

C  There was a budget surplus in 2019

D  There was inflation in 2019

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

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

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

D  None of the above

A   Smoking harms the health of the smoker

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

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

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

A  When the dollar appreciates net exports rise.

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

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

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

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

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

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

D  None of the above

A  Raising the discount rate

B  Purchasing bonds from commercial banks

C  Raising the reserve requirement

D  None of the above

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

B  The government raises taxes on firms that manufacture widgets

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

D  A recession that causes incomes to decrease

A  Increase government spending and decrease taxes

B  Reduce taxes and government spending

C  Increase taxes and government  spending

D  None of the above

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

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

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

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  Cyclical unemployment

B  Frictional unemployment

C  Structural unemployment

D  Disguised unemployment

A  In a command economy, decisions are based on custom

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

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

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

A   US Treasury

B  Senate committee on banking and finance

C  Federal Reserve System

D  Congress