Eco/372 Final Exam 30/30 Answers

ECO/372 Final Exam 30/30 Answers

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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

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

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.

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

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

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

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...