Question 1

Johnson & Johnson managers have shifted production from an Aloe Vera based hand cream to an Oat based one. The cost of the shift has increased by 12%. What is this phenomenon referred to:

Accepted Answer

A)  law of increasing costs
B)  law of decreasing sales
C)  product diversification
D)  product integrationE) C) and D)
F) A) and B)

Question 2

In the expenditure methodology in calculating the GDP of a country, the following are variables EXCEPT:

Accepted Answer

A)  individual consumption
B)  government spending
C)  savings and loans
D)  gross investmentE) A) and B)
F) B) and C)

Question 3

The Solow-Swan growth model uses a number of equations to calculate economic growth factors in the following EXCEPT:

Accepted Answer

A)  output
B)  interest rates
C)  labor-time
D)  investmentE) All of the above
F) B) and D)

Question 4

Net Capital Outflow (NCO)  is the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners. NCO is affected by the following factors EXCEPT:

Accepted Answer

A)  real interest rates paid on foreign assets
B)  real interest rates paid on domestic assets
C)  perceived political and security risks from foreign holdings
D)  GDP of foreign countries where assets are heldE) B) and C)
F) None of the above

Question 5

In the quantity theory of money, what does the (P)  stand for as seen in the equation below? MV = PY

Accepted Answer

A)  period
B)  peak
C)  product
D)  priceE) C) and D)
F) B) and D)

Question 6

All of the following are approaches to calculate a country's GDP EXCEPT:

Accepted Answer

A)  product
B)  income
C)  expenditure
D)  importsE) B) and C)
F) A) and D)

Question 7

The loanable funds ________ brings savers and borrowers together to finance expenditures.

Accepted Answer

A)  process
B)  market
C)  portfolio
D)  legislationE) B) and C)
F) A) and B)

Question 8

The aggregate quantity of raw and manufactured goods demanded by consumers increases when the:

Accepted Answer

A)  personal consumption increases
B)  government spending decreases
C)  foreign investment decreases
D)  interest rates remain the sameE) A) and B)
F) A) and C)

Question 9

The City of Newark, New Jersey has instituted strict rent control since the 1960s in a number of neighborhoods. Rent control is an example of:

Accepted Answer

A)  minimum pricing
B)  price ceilings
C)  collective bargaining
D)  demand inelasticityE) A) and B)
F) All of the above

Question 10

The Big Mac Index as measure of price comparison across countries is a type of:

Accepted Answer

A)  purchasing production parity
B)  purchasing power parity
C)  marginal propensity to consume
D)  marginal propensity to produceE) All of the above
F) A) and B)

Question 11

The current administration in the White House is interested in stimulating the economy through support of small and medium-sized enterprises. Using supply-side economics, the administration can:

Accepted Answer

A)  lower taxes
B)  lower interest rates
C)  increase imports
D)  lower unemploymentE) B) and C)
F) None of the above

Question 12

Prices for goods and services depend largely on the product's lifecycle. Which is the correct stage progression in a product's lifecycle?

Accepted Answer

A)  launch - maturity - decline
B)  growth - proliferation - maturity - decline
C)  growth - maturity - decline
D)  launch - growth - maturity - declineE) None of the above
F) B) and C)

Question 13

The United States has placed an import quota on corn and oats. What are the effects of import quotas on the prices charged by domestic producers of goods?

Accepted Answer

A)  no effects on domestic
B)  make price equal to world price
C)  lower price below world price
D)  raise price above world priceE) A) and B)
F) C) and D)

Question 14

In a short run aggregate supply (SRAS)  curve, an upward turn results in the following shift:

Accepted Answer

A)  decrease in price and output
B)  increase in price and output
C)  increase in price but no increase in output
D)  increase in output but no increase in priceE) A) and C)
F) C) and D)

Question 15

Benin is an African country with a small open economy. An increase in Benin's trade deficit is more likely due to the following EXCEPT:

Accepted Answer

A)  an increase in government regulations
B)  an increase in world interest rates
C)  an increase in government spending
D)  an increase in exports in comparison to importsE) None of the above
F) A) and B)

Question 16

At any given time, there is a steady number unemployment figure which will be resistant to economic growth and government interventionist policies. What is this type of unemployment called?

Accepted Answer

A)  natural rate of unemployment
B)  consistent rate of unemployment
C)  dynamic rate of unemployment
D)  static rate of unemploymentE) B) and C)
F) A) and C)

Question 17

In a legislative meeting designed to investigate new standard of living changes, a number of politicians are contemplating whether there should be an increase in minimum wages or a provision of small business tax cuts. This is an example of:

Accepted Answer

A)  trickle down economics
B)  positive economics
C)  normative economics
D)  negative economicsE) All of the above
F) B) and C)

Question 18

To increase the money supply in the United States, the Federal Reserve:

Accepted Answer

A)  buys government bonds from the public
B)  sells government bonds to the public
C)  buys government bonds from private enterprises
D)  sells government bonds to private enterprisesE) A) and D)
F) A) and C)

Question 19

A tariff is a tax on raw materials and manufactured goods that are produced ___________ and sold __________.

Accepted Answer

A)  overseas; overseas
B)  domestically; overseas
C)  overseas; domestically
D)  domestically; domesticallyE) A) and B)
F) A) and C)

Question 20

Among the indicators of educational attainment as a measure of human capital are the following EXCEPT:

Accepted Answer

A)  elementary & secondary school enrollment
B)  ratio of scientists/skilled technologists to overall population
C)  average years of schooling
D)  fluctuating rates of legal immigrationE) B) and D)
F) A) and C)

Exam 3: Economics

The Solow-Swan growth model uses a number of equations to calculate economic growth factors in the following EXCEPT:

Correct AnswerverifiedShow Answer

Prices for goods and services depend largely on the product's lifecycle. Which is the correct stage progression in a product's lifecycle?

Correct AnswerverifiedShow Answer

The aggregate quantity of raw and manufactured goods demanded by consumers increases when the:

Correct AnswerverifiedShow Answer

Benin is an African country with a small open economy. An increase in Benin's trade deficit is more likely due to the following EXCEPT:

Correct AnswerverifiedShow Answer

All of the following are approaches to calculate a country's GDP EXCEPT:

Correct AnswerverifiedShow Answer

The Big Mac Index as measure of price comparison across countries is a type of:

Correct AnswerverifiedShow Answer

Johnson & Johnson managers have shifted production from an Aloe Vera based hand cream to an Oat based one. The cost of the shift has increased by 12%. What is this phenomenon referred to:

Correct AnswerverifiedShow Answer

In the quantity theory of money, what does the (P) stand for as seen in the equation below? MV = PY

Correct AnswerverifiedShow Answer

To increase the money supply in the United States, the Federal Reserve:

Correct AnswerverifiedShow Answer

The current administration in the White House is interested in stimulating the economy through support of small and medium-sized enterprises. Using supply-side economics, the administration can:

Correct AnswerverifiedShow Answer

Net Capital Outflow (NCO) is the purchase of foreign assets by domestic residents minus the purchase of domestic assets by foreigners. NCO is affected by the following factors EXCEPT:

Correct AnswerverifiedShow Answer

A tariff is a tax on raw materials and manufactured goods that are produced ___________ and sold __________.

Correct AnswerverifiedShow Answer

The City of Newark, New Jersey has instituted strict rent control since the 1960s in a number of neighborhoods. Rent control is an example of:

Correct AnswerverifiedShow Answer

Among the indicators of educational attainment as a measure of human capital are the following EXCEPT:

Correct AnswerverifiedShow Answer

In a legislative meeting designed to investigate new standard of living changes, a number of politicians are contemplating whether there should be an increase in minimum wages or a provision of small business tax cuts. This is an example of:

Correct AnswerverifiedShow Answer

At any given time, there is a steady number unemployment figure which will be resistant to economic growth and government interventionist policies. What is this type of unemployment called?

Correct AnswerverifiedShow Answer

In the expenditure methodology in calculating the GDP of a country, the following are variables EXCEPT:

Correct AnswerverifiedShow Answer

The loanable funds ________ brings savers and borrowers together to finance expenditures.

Correct AnswerverifiedShow Answer

In a short run aggregate supply (SRAS) curve, an upward turn results in the following shift:

Correct AnswerverifiedShow Answer

The United States has placed an import quota on corn and oats. What are the effects of import quotas on the prices charged by domestic producers of goods?

Correct AnswerverifiedShow Answer

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A tariff is a tax on raw materials and manufactured goods that are produced _ and sold .

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