ECN202 Sp 15:
Exam1B
1. One of the themes in the course is macroeconomics matters, so which of the following is a BIG event that can be traced back to
macroeconomic performance?
a. Arab Spring
b. Rise of Hitler
c. Burning of witches in Europe in the Middle Ages
d. Election of Barack Obama in 2008
e. All of the above
2. Which of the following statements can be made based on this graph of
tuition increases at the flagship public 4-year institutions in New England?
In this 13 year period, ___
a.
b.
c.
d.
Instate tuition was higher than out-of-state tuition
Tuition was lowest at UNH
URI had the second highest in-state tuition
In-state tuition rose fastest at UMASS
3. When you look at the graph of the federal government budget
deficit you can see___
a.
b.
c.
d.
Federal Government Budget Surplus/Deficit
fiscal policy at work in the late 1990s as the government
tries to stimulate the economy
fiscal policy at work in 2009 as the government tries to
stimulate the economy
monetary policy at work in 2009 as the Fed tries to stimulate
the economy
monetary policy at work in 2001 as the Fed tries to slow the
economy
4. Which of the following statements is not consistent with the
relationship evident in this graph?
a.
b.
c.
d.
Strong economic growth will help the Democrats in the
2016 election
The Democrats should have won the 1932 election
Republicans could be expected to thwart policies to
improve the economy to increase their chances to win the
2016 election.
Elections such as the 2016 where there will be no
incumbent president running favor the opposition party.
5. Which of the following is NOT correct statement about the labor market?
a. In the Great Recession employment decreased in the construction industry
b. In the Great Recession the labor force participation rate increased
c. In the Great Recession long-term unemployment increased substantially
d. In the Great Recession the number of discouraged workers increased
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6. Which variables are in this graph?
a.
b.
c.
d.
The rate of unemployment and underemployment
Shares of total employment in manufacturing and services
Labor force participation rates for men and women
Unemployment rates for college and high school educated males
7. The Obama stimulus was a response to the Great Recession. How would we show the stimulus with AS-AD?
a. An inward shift in AD
b. An outward shift in AD
c. An inward shift in AS
d. An outward shift in AS
8. If we have a very simple world in which Italy and Greece are
contemplating trading cloth (C )l and wine (W). If these
production possibility curves represent the productive capacities
of the two countries, ____
a.
b.
c.
d.
there is no basis for trade
we can expect the opening of clothing factories in Italy as
Italy exports clothes
we can expect the closing of clothing factories in Italy as
Italy exports olive wine
we can expect the opening of wineries in Greece as Italy
imports wine
9. The headline read: "SUV sales fall as gas prices rise.” The best way to translate this story into a S&D graph of the SUV market would be
graph __.
a. a
b. b
c. c
d. d
e. e
10. The headline read: "Unrest in Iraq drives oil prices higher.” The best way to translate this story into a S&D graph of the SUV market
would be graph __.
a. a
b. b
c. c
d. d
e. e
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11. The best explanation of what was driving the price of coffee in the
first half of 1997 would be ___
a.
b.
c.
d.
an increase in both supply and demand
an increase in demand and a decrease in supply
an increase in supply
a decrease in demand
12. You cannot have missed the debate in the US over the stimulus package in 2009 - or at least you should not have missed it. In the debate
you could see ______ pushing for tax cuts and ______ pushing for spending increases targeted at some lower income groups.
a. liberals
/ Marxists
b. conservatives / liberals
c. conservatives/ conservatives
d. liberals / conservatives
13. Given the track record of tariff rates in the US reflected in the
graph, which of the following statements is most likely to be correct.
a.
b.
c.
In the 1920s the US Congress was looking to grow international
trade
In the Civil War the North raised tariffs to decrease US imports In
the post WW II era the US Congress was looking to reduce
international trade
The US Congress’ immediate response to the Great Depression’s
onset was a lowering of tariffs
14. Given the data in the table above, what was the unemployment rate in 2008? (closest approximation)
a. 9.6%
b. 8.9%
c. 8.1%
d. 5.8%
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15. GDP is used as an indicator of a country’s economic situation, so if I were interested in doing some international comparisons of
improvements in the standard of living over the past decade, which of the following would be the best indicator?
a. Real GDP (US$s)
b. Real per capita GDP (PPP)
c. Nominal GDP per capita (national currency)
d. CPI (euros)
16. This is a graph of the price level of three important elements in a
family budget. Which of the following is true?
a.
b.
c.
d.
A is apparel and B is tuition
C is apparel and A is tuition
A is oil and B is apparel
B is medical and C is tuition
17. GDP is used as an indicator of a country’s economic situation, so if I were interested in getting a good sense of how much output in the
economy shrank in the most recent recession, which of the following would be the best indicator?
a. real GDP
b. real GDP per capita
c. CPI
d. nominal GDP
18.
a.
b.
c.
d.
e.
Given the way we measure GDP, which of the following would increase GDP?
My purchase of a 2012 BMW
My daughter’s decision to leave her job to raise her children
My son’s decision to ride his bike to work instead of driving
My purchase of a new computer for my office
My purchase of Facebook stock as a good investment
19. If you were president, the worst-case scenario would be a decline in GDP and a rise in inflation because both are seen by people as bad
things. How would we best show a shock that created this outcome using the AS-AD diagram?
a. An outward shift in AD
b. An outward shift in AS
c. An inward shift in AD
d. An inward shift in AS
20. What was the macroeconomic indicator that showed so graphically the magnitude of the Great Depression?
a. Inflation rate
b. Balance of trade deficit
c. Budget deficit
d. Unemployment rate
21. Above is a table of output market data. Based on the table, in 2000 GDP was ____. [best approximation]
a. 9,040
b. 10.920
c. 11,210
d. 12,340
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1980
1998
2000
2005
2010
2013
22. What is the real interest rate in 2010?
a.
4.8
b. 3.2
c. 1.6
Interest
rate
11.4
5.3
6.0
4.3
3.2
2.4
CPI
82
163
172
195
218
233
Earnings
241
449
481
544
637
678
Inflation
rate
13.5
1.6
3.4
3.4
1.6
1.5
d. .8
23. The headline was "“UK house prices start year with a bang, fuelled by first-time buyers." If I wanted to show this using a S&D graph then I
would ___.
a. shift the demand curve out
b. shift the demand curve in
c. shift the supply curve in
d. shift the supply curve out
24. Which of the following statements can be made based on this graph of the ratio
of incomes of college grads to the incomes of high school grads – a measure people
use to capture the “college premium?”
a.
b.
c.
d.
The college degree has a bigger impact on the earnings of males than on the
earnings of females
The “college premium” is higher for females, although the gap is declining.
The “college premium” has gotten smaller for males since 1990
Female earnings fell through mid 2000s and then began to rise.
25. If I were looking for evidence that the Fed was trying to stimulate the economy, I would look at ___.
a. Budget deficit figures to see if the budget deficit was increasing
b. Interest rats to see if interest rates were rising
c. Money supply figures to see if the money supply was increasing
d. Government spending figures to see if government spending was increasing.
26. If you were president, the worst-case scenario would be a decline in GDP and a rise in inflation because both are seen by people as bad
things. How would we best show a shock that created this outcome using the AS-AD diagram?
a. An outward shift in AD
b. An outward shift in AS
c. An inward shift in AD
d. An inward shift in AS
27. Which one of the following statements is true when we look at economic history?
a. inflation rates tend to be lower during wars
b. inflation rates have been rising since the onset of the Great Recession
c. the highest inflation rates in the 1990s tended to be in the former Soviet Union
d. differences in the inflation rates of European countries rose sharply after adoption of the euro
28. There is a very clear relationship between inflation and interest rates in the
time-series graph to the right. If you chose to look at the annual inflation and
interest rate data in a scatter diagram, which of the scatter graphs below would best
represent this relationship? B
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29. Which is the best story to go with the diagrams above?
a. Under Mao, China was a success story due to its openness to international trade
b. Under Gandhi, India was a success story due to its openness to international trade
c. The success of the Asian Tigers and Japan in the first decades after WW II was due to their openness to international trade
d. The slowdown in W. Europe and the US in the latter period was due to substantial increases in tariffs
30. Above is a table of four variables representing certain aspects of the US labor market. The columns are all percentages and represent the
labor force participation rate for white females and males and unemployment rates for white and black males. Given the characteristics of the
US labor market, which of the columns would be the labor force participation rate for white females?
a. A
b. B
c. C
d. D
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