ECO 372 Final Exam (Latest) UOP Complete Course Tutorials

ECO 372 Final Exam

1. News Story: Workers at a car-manufacturing plant in Flint, Michigan are laid off because the economy is weak and GM cars aren't selling well. GM isn't sure when the plant will reopen. What type of unemployment describes the workers' situation?

Frictional unemployment Structural unemployment Full unemployment Cyclical unemployment

2. Globalization that allows governments to pursue expansionary policies can be dangerous because it can lead to:

A reduction in the debt ceiling Goods price inflation Asset price inflation Goods price deflation

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3. Macroeconomics is:

The study of aggregate economic relationships. An analysis of economic reality that proceeds from the parts to the whole. The study of pricing policies of firms and the purchasing decisions of households. The study of individual choice and how that choice is influenced by economic forces.

4. Which of the following types of unemployment is considered to be the most controllable through demand-side macroeconomic policy?

Frictional unemployment Cyclical unemployment Structural unemployment Natural unemployment

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5. If banks hold excess reserves whereas before they did not, the money multiplier:

Will become smaller Will become larger Might increase or might decrease Will be unaffected

6. Using the expenditure approach, gross domestic product equals:

The sum of consumption, investment, government purchases, and net exports Gross national product minus net exports The sum of consumption, investment, and government purchases Gross national product

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7. How do investment in technology and investment in capital differ?

They have similar effects on output so they have no important differences from an economic point of view. They have the same effects on output but investments in technology are much more closely tied to the level of saving than investments in capital. They have different effects on output because of the positive externalities associated with investments in capital. They have different effects on output because of the positive externalities associate with investments in technology.

8. The interest rate is the price paid for use of a:

Real asset. Financial liability. Financial asset. Real liability.

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9. If the reserve requirement is 20 percent, and banks keep no excess reserves, an increase in an initial inflow of $100 into the banking system will cause an increase in the money supply of:

$50 $100 $500 $20

10. Suppose farmers can use their land to grown either wheat or corn. The law of supply predicts that an increase in the market price of wheat will cause: