3. If capital goods are on the vertical axes and consumer goods are on the horiz
ID: 1177096 • Letter: 3
Question
3. If capital goods are on the vertical axes and consumer goods are on the horizontal axes a point on the curve and to the upper left would indicate.
A) Under allocation of resources
B) Resources are fully utilized and used to produce mainly consumer goods
C) Resources are fully utilized and used to produce mainly capital goods
D) Resources are under utilized and used mainly to produce capital goods
E) Both choices A and D
4. An example of a labor resource would be
A) The construction of a new factory to produce calculators
B) Oil used to provide energy
C) A bulldozer for a construction company
D) A bulldozer driver
E) Both choices C and D
13. The product market, which statement about the product market in the cirular flow diagram is correct.
A) Money flows into the product market from business's and resources flow into the product market from households
B) Goods flow into the product market from business's and money flows into the product market from households
C) Resources flow into the product market from households and goods flow out of the product market to business%u2019s
D) Goods flow into the product market from the resource market and income flows out to the households
E) Goods flow into the resource market and resources flow into the product market
14. The market system, which statement below best describes the market system.
A) Resources are owned by government
B) Does not allow for freedom of enterprise
C) Prices are set by government control
D) Protects private property
E) Both choices C and D
16. Assume sticky prices, if output at the lowest point of the producer%u2019s average total cost curve is 300 units per week and demand is for 450 units then
A) Output will increase
B) Output will increase but inventories will remain the same
C) Output will remain the same but inventories will decline
D) Output and inventories will all remain the same
E) Output will increase but inventories will remain the same
17. Assume sticky prices, if output at the lowest point of the producers average total cost curve is 5000 units per week and demand is for 3068 units then.
A) Output will decline
B) Output will decline but inventories will remain the same
C) Output will remain the same but inventories will build up
D) Output and inventories will remain the same
E) Output will decline and inventories will remain the same
18. Assume flexible prices and the producer is producing at the lowest point on their average total cost curve which is 1596 units a week, if demand is for only 456 units that week the producer will.
A) Lower output and reduce employment
B) Lower output but maintains current levels of inventories
C) maintain current levels of output
D) Maintain current levels of output but allow inventories to build up
E) Maintain current levels of output and allow inventories to increase
19. Assume sticky prices, if the producer is producing at the lowest point on their average total cost curve, which is 4587 units, a week, if demand that week is for 5821 units the producer will
A) Maintain current levels of output and deplete inventories
B) Increase output and inventories
C) Increase output but maintains current levels of inventories
D) Maintain current levels of output and inventories
E) Reduce output and inventories
23. The size of the population is 5000 of these 125 are under 16 and 25 are incarcerated 45 people are working part time but desperately seeking full time work, 95 individuals have lost their jobs of these 45 of them have given up looking. What is the size of the unemployment rate?
A) 10%
B) 6%
C) 3%
D) 15%
E) 1%
28. If real GDP in year one is 456,123 and in year two it is 789,456 what will the percent rate of change be in real GDP from year one to year two.
A) 456%
B) 5896%
C) 12%
D) 23%
E) 73%
30. Real GDP in year one is 500 in year two real GDP is 800, if GDP continues to grow at this rate how long will it take for the size of the economy to double.
A) More than ten years
B) More than one year but less than two
C) Less than one year
D) More than two years
E) Three years exactly
31. Income is 900, savings is 20, and then income increases to 1000, and consumption is 975, what will the marginal propensity to consume be.
A) Nothing
B) .95
C) .65
D) 1.25
E) .90
34. Given an MPC of .8 if the C + I equilibrium level of aggregate expenditure is 600 billion, then government spending of 50 billion is included, what will the new equilibrium level of aggregate expenditure be.
A) 600
B) 1000
C) 850
D) 800
E) 560
35. Using the information from the previous question in #34, if government taxes are increased by 50 billion to cover the increase in government spending what will the new equilibrium level of aggregate expenditure be.
A) 600
B) 650
C) 550
D) 810
E) 1020
43. The reserve requirement is 20% the bank currently has liabilities of $500,000 deposited in checking accounts of this the bank has lent out $250,000 and purchased $75,000 in treasury bonds, this bank can.
A) Not lend any more as it is currently not maintaining its reserve requirement
B) Either make loans or purchase treasury bonds in the amount of $75,000
C) Lend only $25,000 but cannot purchase any additional treasury bonds
D) Purchase treasury bonds in the amount of $75,000 and at the same time make loans in the amount of $50,000
E) Purchase an unlimited amount in treasury bonds but can only lend an additional $10,000
45. The reserve ratio is 20% the entire banking system has liabilities of $800 billion, of this $400 billion has been lent out and $100 billion is used to purchase treasury bonds. How much new M1 money can the banking system create?
A) $800 billion
B) $400 billion
C) $459 billion
D) $700 billion
E) Nothing
46. Given each countries current stock of resources the Philippines are capable of producing 600 tons of rice a year and 1200 tons of fish a year. Given its resources the Dominican Republic is capable of producing 1500 tons of rice a year and 1500 tons of fish a year, thus
A) The Dominican Republic has an absolute advantage over the Philippines and there would be no advantage for them to trade.
B) The Philippines have an absolute advantage in producing rice so there would be no advantage for them to trade
C) The Philippines have a comparative advantage in producing fish so they should specialize and produce fish and trade with the Dominican Republic for their rice
D) The Dominican Republic has a comparative advantage in producing fish so they should specialize and produce fish and trade with the Philippines for their rice
E) The Philippines have a comparative advantage in producing rice so they should produce rice and trade with the Dominican Republic for their fish
48. If the demand for Mexican products increases in the United States what will happen to the value of the dollar and the peso.
A) The value of both countries currency will not change
B) The value of the dollar will depreciate as there is increased demand to purchase Mexican products therefore there will be increased demand for Mexican peso%u2019s
C) The value of the peso will appreciate, as there is increased demand for their currency so Americans can buy their products
D) The value of both countries currencies will appreciate
E) Both choices B and C
3. If capital goods are on the vertical axes and consumer goods are on the horizontal axes a point on the curve and to the upper left would indicate.
A) Under allocation of resources
B) Resources are fully utilized and used to produce mainly consumer goods
C) Resources are fully utilized and used to produce mainly capital goods
D) Resources are under utilized and used mainly to produce capital goods
E) Both choices A and D
4. An example of a labor resource would be
A) The construction of a new factory to produce calculators
B) Oil used to provide energy
C) A bulldozer for a construction company
D) A bulldozer driver
E) Both choices C and D
13. The product market, which statement about the product market in the cirular flow diagram is correct.
A) Money flows into the product market from business's and resources flow into the product market from households
B) Goods flow into the product market from business's and money flows into the product market from households
C) Resources flow into the product market from households and goods flow out of the product market to business%u2019s
D) Goods flow into the product market from the resource market and income flows out to the households
E) Goods flow into the resource market and resources flow into the product market
14. The market system, which statement below best describes the market system.
A) Resources are owned by government
B) Does not allow for freedom of enterprise
C) Prices are set by government control
D) Protects private property
E) Both choices C and D
Explanation / Answer
B) Resources are fully utilized and used to produce mainly consumer goods
E) Both choices C and D
D) Goods flow into the product market from the resource market and income flows out to the households
E) Both choices C and D
B) Output will increase but inventories will remain the same
A) Output will decline
A) Lower output and reduce employment
C) Increase output but maintains current levels of inventories
D) 15%
B) 5896%
D) More than two years
D) 1.25
E) 560
C) 550
D) Purchase treasury bonds in the amount of $75,000 and at the same time make loans in the amount of $50,000
A) $800 billion
C) The Philippines have a comparative advantage in producing fish so they should specialize and produce fish and trade with the Dominican Republic for their rice
E) Both choices B and C
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