ECN 211 Final Exams 1, 2, 3 ASU Douglas Questions

ECN 211 Final (Exams 1, 2, 3) ASU Douglas Questions with Correct Answers Graded A+ Which of the following is included in GDP?

• recreational marijuana purchased from a drug dealer by a college student?
• Recreational marijuana purchased and consumber by a man in his attic.
• medical marijuana purchased from a government-run pharmacy by a glaucoma patient.
• All of the above - Correct Answer C. medical marijuana purchased from a government-run pharmacy

by a glaucoma patient.you know a candy bar cost five cents in 1962. You also know the CPI for 1962 and the CPI today. Which of the following would you use to compute the price?

• five cents * today's CPI- five cents * CPI in 1962

B.Five cents *(1962 CPI/ Today's CPI)

• five cents * (Today's CPI/ 1962 CPI)
• five cents * (today's CPI - 1962 CPI)/1962 CPI - Correct Answer C. five cents * (Today's CPI/ 1962 CPI)

Discouraged workers are included in...

• Frictional Unemployment

B.The number of unemployed

• the labor force
• none of the above - Correct Answer D. none of the above

when a country has a comparative advantage in producing a certain good,

• The country should produce just enough of that good for its own consumption.
• the country should import that good.
• The country's opportunity cost of that good is high relative to other countries' opportunity costs of

the same good.

• None of the above - Correct Answer D. None of the above

The unemployment rate is computed as the number of unemployed 1 / 3

• times the labor-force participation rate, all times 100.
• divided by the adult population, all times 100
• divided by the number of employed, all times 100
• Divided by the labor force, all times 100. - Correct Answer C. divided by the number of employed, all

times 100 In the economy of Talikastan in 2015, exports were $500, GDP was $6400, Government Purchases were $1700, Imports were $400, and investment was $1800. What was Talikastan's consumption in 2015?

A. $2000

B. $3800

C. $2800

• $3000 - Correct Answer A. $2000

Sheri, a U.S. Citizen, works only in Germany. The value she adds to the production in Germany is included..

• in German GDP, but is not included in U.S. GDP
• in U.S. GDP, but is not included in German GDP
• in both German GDP and U.S. GDP.
• in neither German GDP nor U.S. GDP. - Correct Answer A. in German GDP, but is not included in U.S.

GDP

Transfer payments are:

• not included in GDP because they are not payments for currently produced goods or services.
• Included in GDP because they eventually will be spent on consumption.
• Included in GDP because they represent income to individuals.
• not included in GDP because taxes will have to be raised to pay for them. - Correct Answer A. not

included in GDP because they are not payments for currently produced goods or services.Cyclical unemployment refers to

• Changes in unemployment due to changes in natural rate of unemployment. 2 / 3

• The portion of unemployment created by job search.
• The portion of unemployment created by wages set above the equilibrium level.
• short-run fluctuations around the natural rate of unemployment. - Correct Answer D. short-run

fluctuations around the natural rate of unemployment.The CPI is more commonly used as a gauge of inflation than the GDP deflator is because

• the GDP inflator cannot be used to gauge inflation.
• the CPI is calculated more often than the GDP deflator is
• the CPI is easier to measure
• the CPI better reflects the good and services bought by consumers. - Correct Answer D. the CPI better

reflects the good and services bought by consumers.consider 2 labor markets in which jobs are equally attractive in all respects other than the wage rate. All workers are equally able to do either job. Initially, both labor markets are perfectly competitive. If a union organizes workers in one of the markets, then the wage rates will tend to

• rise for the union jobs and fall for the nonunion jobs
• Rise in both markets
• Fall in both markets
• rise for the union jobs, but remain unchanged for the nonunion jobs. - Correct Answer A. rise for the

union jobs and fall for the nonunion jobs A tire manufacturer produces 400 tires valued at $20 each. Three hundred tires are sold to a tire shop, which then sells them to households for $50 each. The remaining tires are unsold and are added to the tire manufacturer's inventory. How much is added to GDP.

A. $13,000

B. $15,000

C. $17,000

• $8000 - Correct Answer C. $17,000

Ms. Lane borrowed $1,000 from her bank for one year at an interest rate of 10 percent. During that year, the price level went up by 15 percent. Which of following statements is correct.

• Ms. Lane will repay the bank fewer dollars than she initially borrowed.
• / 3