Econ 102 - Principles of Macroeconomics » Winter 2021 » Exam 2

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Question #1
Unemployment that rises and falls with the business cycle is called
A.   natural rate of unemployment
B.   cyclical unemployment
C.   frictional unemployment
D.   structural unemployment
Question #2
The price of hand sanitizer rises from $2.50 to $3.00 per bottle. Quantity demanded changes from 200 bottles to 500 bottles. Calculate the elasticity.
A.   |E| = 0.21
B.   |E| = 4.5
C.   |E| = 4.71
D.   |E| = 0.62
Question #3
The nominal interest rate is 0.3% and the inflation rate is 2.6%. What is the real interest rate?
A.   2.3%
B.   2.9%
C.   -2.3%
D.   -2.9%
Question #4
Which of the following goods is likely to have an elastic demand?
A.   prescription medication
B.   water
C.   cheesecake
D.   cigarettes
Question #5
If a country exports more than it imports, this country has a
A.   trade shortage
B.   balanced trade
C.   trade surplus
D.   trade deficit
Question #6
Singapore's GDP is $364.2 billion USD and the GDP growth rate is 3.1%. What will Singapore's GDP be in 10 years?
A.   $29,850,862 billion USD
B.   $494.2 billion USD
C.   $5,420.7 billion USD
D.   $488,853,252 billion USD
Question #7
When |E| < 1, indicating a low responsiveness of quantity demanded to changes in price, demand is said to be
A.   inelastic
B.   perfectly inelastic
C.   unit elastic
D.   elastic
Question #8
How might the unemployment rate be understated?
A.   people work part time hours when they would prefer to work full time
B.   retired people return to the workforce
C.   homemakers return to work
D.   full time students graduate and find work
Question #9
The real GDP of Coruscant is $715 billion and nominal GDP is $785 billion. Calculate GDP deflator.
A.   1.097
B.   0.91
C.   109.8
D.   91
Question #10
The following choices can lead to capital deepening except
A.   poor rule of law
B.   good rule of law
C.   investments in research and development
D.   investments in education and healthcare
Question #11
How might sticky wages keep the unemployment rate high?
A.   sticky wages are flexible
B.   workers under an implicit contract will want to supply less labor hours than what is demanded
C.   sticky wages adjust quickly to changes in the economy
D.   workers under an implicit contract will want to supply more labor hours than what is demanded
Question #12
Which measures how responsive quantity demanded is to changes in income?
A.   income elasticity of supply
B.   price elasticity of supply
C.   price elasticity of demand
D.   income elasticity of demand
Question #13
The Industrial Revolution gave rise to all of the following except
A.   manufacturing towns
B.   pollution
C.   agricultural jobs
D.   collective bargaining
Question #14
There are 7.4 million people unemployed and 32.6 million employed with an adult population of 71.7 million people. What is the unemployment rate?
A.   18.5%
B.   0.185%
C.   0.103%
D.   10.3%
Question #15
Which of the following statements is true about GDP?
A.   GDP includes second hand goods
B.   GDP includes government purchases
C.   GDP includes illegal drugs
D.   GDP counts goods made outside of the country
Question #16
Which of the following can lead to higher labor productivity?
A.   low wages
B.   poor education system
C.   poor working conditions
D.   technological advancements
Question #17
When measuring GDP growth, _____________ is used because it is adjusted for inflation.
A.   GDP deflator
B.   real GDP
C.   GDP per capita
D.   nominal GDP
Question #18
Income falls by 15% and quantity demanded rises by 24%. What is the income elasticity of demand and what type of good is this?
A.   normal good, |E| = 1.6
B.   normal good, |E| = 0.625
C.   inferior good, |E| = 1.6
D.   inferior good, |E| = 0.625
Question #19
Who is considered not in the labor force?
A.   self employed people
B.   unemployed people looking for work
C.   underemployed people
D.   homemakers
Question #20
Why is convergence likely to occur in low and middle-income countries?
A.   improvements in technology will have a large effect on their economies
B.   improvements in technology will have a small effect on their economies
C.   improvements in technology will have a little effect on their economies
D.   improvements in technology will have no effect on their economies
Question #21
There are 12.4 million people unemployed and 42.7 million employed with an adult population of 61.9 million people. What is the labor force participation rate?
A.   20%
B.   0.89%
C.   69%
D.   89%
Question #22
Which is likely to have an elastic supply?
A.   rare artwork
B.   custom jewelry
C.   antique furniture
D.   laptops

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