2025 Latest Econ 304 Final Exam Prep Test

pg. 1 2025 Latest Econ 304 Final Exam Prep Test Bank With 600 Exam Practice Questions And Correct Verified Answers/ Econ 304 Final Exam 2025 Prep (New!)

• Important characteristics of macroeconomic models include all of the following

except:

• simplifying assumptions.
• functional relationships based on controlled experiments.
• endogenous and exogenous variables.
• ignoring variables that are not crucial to the problem being evaluated
• functional relationships based on controlled experiments.

2. Two equivalent ways to view GDP are as the:

• total payments made to all workers in the economy or the total profits of all

firms and businesses in the economy.

• total expenditures on all goods produced in the economy or the total income

earned by skilled workers in the economy.

• total profits of all firms and businesses in the economy or the total consumption

of goods and services by al household in the economy

• Total income by everyone in the economy or total expenditure on the economy

s output of goods and services,

• Total income by everyone in the economy or total expenditure on the economy

s output of goods and services,

• The inflation rate is a measure of how fast: A) the total income of the economy

is growing. B) unemployment in the economy is increasing. C) the general level of prices in the economy is rising. D) how fast nominal GDP is increasing.

• the general level of prices in the economy is rising
• Two striking features of a graph of U.S. real GDP per capita over the twentieth

century are the:

• overall upward trend interrupted by a large downturn due to the economic 1 / 4

pg. 2 depression in the 1930s.

• nearly constant level with a large downturn in the 1930s.
• downward trend in the first half of the century followed by the upward trend in

the second half.

• constant level in the first half of the century followed by the upward trend in the

second half.overall upward trend interrupted by a large downturn due to the economic depression in the 1930s

• A graph of the rate of inflation in the United States over the twentieth century

shows:

an overall upward trend interrupted by a large downturn in the 1930s.B)some periods of deflation in the first half of the century, but only positive rates of inflation in the second half of the century.

• a relatively steady, positive level throughout the century except for deflation in

the 1930s.

• a constant rate of inflation in the first half of the century followed by an upward

trend in the second half.B)some periods of deflation in the first half of the century, but only positive rates of inflation in the second half of the century.

6. All of the following are types of macroeconomics data except the:

• unemployment rate.
• growth rate of real GDP.
• inflation rate.
• price of an IBM computer.
• price of an IBM computer.

7. Macroeconomics does not try to answer the question of:

• why do some countries experience rapid growth.
• what is the rate of return on education.
• why do some countries have high rates of inflation.
• what causes recessions and depressions
• what is the rate of return on education.
• Which of the following statements about economic models is true?
• There is only one correct economic model. 2 / 4

pg. 3

• All economic models are based on the same assumptions.
• Economists use different models to address different economic phenomenon.
• The purpose of economic models is to show how endogenous variables affect

exogenous variables.

• Economists use different models to address different economic phenomenon.
• When studying the short-run behavior of the economy, an assumption of is more

plausible, in contrast to studying the long-run equilibrium behavior of an economy, when an assumption of is more plausible.

• inflation; unemployment
• unemployment; inflation
• flexible prices; sticky prices
• sticky prices; flexible prices
• sticky prices; flexible prices

10. Macroeconomists are like scientists because they both:

• design data and conduct controlled experiments to test their theories.
• rely on data analyzed from experiments they set up in a laboratory.

c collect data, develop hypotheses, and analyze the results.

• are unlimited in their use of controlled experiments.

c collect data, develop hypotheses, and analyze the results.

11. Variables that a model tries to explain are called:

A)endogenous.

• exogenous.
• market clearing.
• fixed.

A endogenous

• The amount of physical capital in an economy is a and the amount of new

investment is a

• flow; stock '
• stock; flow
• final good; intermediate good
• intermediate good; final good

b 3 / 4

pg. 4

• All of the following transactions that took place in 2009 would be included in

GDP for 2009 except the purchase of a: A) book printed in 2009, entitled The Year

• B) 2001 Jeep Cherokee. C) year 2010 calendar printed in 2009. D) ticket to

see the movie 2001.B

• Assume that a firm buys all the parts that it puts into an automobile for

$10,000, pays its workers $10,000 to fabricate the automobile, and sells the automobile for $22,000. In this case, the value added by the automobile company

is:

A $12,000.

B) $10,000.

C) $20,000.

D) $22,000.

A

• Real GDP means the value of goods and services is measured in prices.
• current
• actual

C)constant

• average

C

• If nominal GDP grew by 5 percent and real GDP grew by 3 percent, then the

GDP deflator grew by approximately percent.A)2

• 3
• 5
• 8

A

• All of the following actions are investments in the sense of the term used by

macroeconomists except:

• IBM's building a new factory.
• corner candy store's buying a new computer.
• John Smith's buying a newly constructed home.
• Sandra Santiago's buying 100 shares of IBM stock.
• / 4