ECON 2301 (Lee) Exam 2 Study Guide
40 Multiple-Choice Questions. Test date: May 30 (Thursday) in class. Time allowance: 90 minutes. Bring scantron form (882-E) and pencil.Textbook chapters: 24, 25, 28, 29, 30
[These are questions. Numbers included in questions have been omitted.]
- Suppose your income rose 100% between 2000 and 2011, while the CPI rose 80%.
- Your standard of living has likelyIf the consumer price index was 100 in the base year and 107 in the following year, then the inflation rate was
- Michelle bought word-processing software in 2009 for $75. Michelle’s cousin, Barry, bought an upgrade of the same software in 2010 for $75. To which problem in the construction of the CPI is this situation most relevant?
- In 1931, President Herbert Hoover was paid a salary of $5,000. Suppose the consumer price index is 10 for 1931 and xxx for 2011. President Hoover’s 1931 salary was equivalent to a 2011 salary of about
- If the nominal interest rate is 3 percent and the rate of inflation is 2 percent, then the real interest rate is
- Corey deposits $200 in a savings account that pays an annual interest rate of 2 percent. Over the course of a year, the inflation rate is xx percent. At the end of the year, Corey has
- A nation's standard of living is best measured by its
- The major explanation for large variations in living standards around the world is
- All of the following can affect a nation’s productivity except
- Megan is a landscaper with a degree in landscaping. She uses landscaping equipment in her job. Which of the following are included in her human capital?
- If a society forgoes current consumption to invest in capital goods, which of the following will most likely happen?
- The catch-up effect refers to the idea that
- All of the following would tend to raise economic growth except
- Rapid population growth
- Who is included in the labor force by the Bureau of Labor Statistics?
- Over the past several decades in the United States, the labor-force participation rate of women has
- The effect of a college degree on a person in the workforce is
- When the economy is in a recession, there would be more people as
- John is a stockbroker. He has had several job offers, but he has turned them down because he thinks he can find a firm that better matches his tastes and skills. Curtis has looked for work as an accountant for some time. While the demand for accountants doesn’t appear to be falling, there seems to be more people applying than jobs available.
- Minimum wages create unemployment in markets where they create a
- At full employment, the economy would still have all of the following except
- In economics, “money” refers to
- Which of the following best illustrates the medium of exchange function of money?
- U.S. government securities are
- Compared to other assets such as a house, money is
- Which of the following is included in M2 but not in M1?
- Which of the following does the Federal Reserve not do?
- When conducting an open-market sale, the Fed
- If the reserve ratio is xx percent, the money multiplier is
- If the reserve ratio is xx percent, then a new deposit of $xxx into a bank account
- If the reserve ratio is xx percent and the Fed buys $xxx worth of government bonds, what is the potential change in the size of the money supply?
- When the Fed decreases the discount rate, banks will
- In a fractional-reserve banking system, an increase in reserve requirements
- The supply of money increases when
- If M (money supply) = 3,000, P (price level) = 2, and Y (real output) = xxx, what is velocity?
- When the price level falls, the number of dollars needed to buy the same amount of goods and services
- According to the quantity theory of money, if the money supply increases 10 percent, then
- In the long run, if the central bank increases the money supply,
- High and unexpected inflation has a greater cost
- In order to maintain stable prices, a central bank must