Principles of Economics - Exam 1 Form B with Solutions | ECON 2006, Exams of Introduction to Macroeconomics

Download Principles of Economics - Exam 1 Form B with Solutions | ECON 2006 and more Exams Introduction to Macroeconomics in PDF only on Docsity! Econ 2006-11665 Exam | McLeod FORM B 1. Which of the following is an example of fiscal policy? SAS A federal tax cut. “ B) Decreasing the interest rate, C) Deregulation of the airline-industry. D) Increasing the supply.of money 2. Which of the following would shift the supply curve for a product to the left? ~~ A) A decrease in the price of a complement. f B) An increase in-income, assuming the good is an inferior good, pe C increase in the price of an input used in the production of the good. D) A decreasein-the-price of the good. oe E) Two of the above answers are correct. 1 5 \ Ee i Ly 3. The unemployment rate just went up to 6.0%. If 1,410,000 people are employed, how many people are unemployed? {avi 90,000 ms \ a. Pe A b) 84,600 . ©) 1,500,000 fo . d) cannot be determined from this information 4. You are given the following information: Population 16 years old or over (millions) 203.1 Employed (millions) 129.6 Unemployed (millions) 6.7 The labor-force participation rate in 1997 equals: db A) 33% B) 4.9% C) 63.8% WY, 67.1% : E) 95.1% A Which of the following pairs of events is most likely to cause the equilibrium price of guitars to fall, but : have an indeterminate effect on the equilibrium quantity of guitars? “+43 The price of wood used to make guitars rises;-and.at the same time more people decide they want to play guitar. °B).A technological breakthrough makes guitars cheaper to produce, and the price of guitar amplifiers (a S complement of guitars) goes up. 1 JO" technological breakthrough makes guitars cheaper to produce, and the price of guitar amplifiers (a : complement of guitars) goes down. D) The price of wood used to make guitars rises, and people's income falls (assume guitars are a normal good). The next 4 questions refer to the following hypothetical information: “ Durable Goods: $2000 Non-durable Goods: $4000 |=. y Services: $12,000 m4 ee (4 ,Ove Non-residential Investment: $1200 -> “‘ 40? Residential Investment: $1500 ala Changes in Business Inventories: -$200 ~ Government-Spénding (Federal, State and Local combined): $6000 I $2000 Exporté? $1500 Capital-Stock-at the Beginning of the year: $200,000 Capital-Steck at the End of the year: $202,000 K “4 poe gy cording to the expenditure approach, what is the value of Consumption? we “— "63-9600 Eysase0 T) The answer can be determined, but it is none of the above. By¥S980 ¥ F) $10,000 J) There is not enough information to determine the answer. Gp$as800 Gy420%000 - Be “ey $22,000 2X What is the value of Gross Investment? A) $500 E) $2,500 T) The answer can be determined, but it is none of the above. E B) $900 F) $10,000 J) There is not enough information to determine the answer. C) $1,300 G) $20,000 yDY'§2,000 H) $22,000 8. What is the value of Net Exports? A) $500 ° E) $2,500 ‘The answer can be determined, but it is none of the above. t B) $900 F) $10,000 J) There is not enough information to determine the answer. C) $1,300 G) $20,000 D) $2,000. H) $22,000 & What is the value of Depreciation? A) $500 E) $2,500 I) The answer can be determined, but it is none of the above. B) $900 F) $10,000. {DsThere is not enough information to determine the answer. C) $1,300 G) $20,000 D) $2,000 H) $22,000 10. Suppose the Demand for guitars is given by Qp = 2500 - 2P, and the supply of guitars is given by Qs = 250 + P, where P is the price of guitars, and Qp is the quantity demanded of guitars, and Qs is the quantity supplied of guitars . If the price of guitars is $600. which of the following statements is true? B) There is excess demand for guitars, and we expevt the price to fall. C) There is excess supply for guitars, and we expect the price to rise. D) There is excess supply for guitars, and we expect the price to fall. E) The market for guitars is in equilibrium, and we do not expect the price to change. A Adhere is excess demand for guitars, and we expect tlie price to rise.