Econ 102 - Principles of Macroeconomics » Spring 2022 » Exam 2

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Question #1
Cyclical unemployment occurs when
A.   the supply of labor exceeds the demand for labor
B.   people lack skills desired by employers
C.   unemployment changes with the business cycle
D.   people are in between jobs
Question #2
The price of hand sanitizer rises from $2.50 to $3.00 per bottle. Quantity demanded changes from 500 bottles to 400 bottles. Calculate the elasticity.
A.   |E| = 1.5 Demand is elastic
B.   |E| = 0.67 Demand is inelastic
C.   |E| = 1.2 Demand is elastic
D.   |E| = 0.82 Demand is inelastic
Question #3
The nominal interest rate is 0.2% and the inflation rate is 2.7%. What is the real interest rate?
A.   2.5%
B.   -2.9%
C.   2.9%
D.   -2.5%
Question #4
Which of the following goods is likely to have an elastic demand?
A.   hearing aid
B.   sports car
C.   water
D.   gas
Question #5
A trade surplus occurs when a country
A.   exports more than it imports
B.   exports less than it imports
C.   imports more than it exports
D.   does not engage in trade
Question #6
India's GDP is $2.7 trillion USD and the GDP growth rate is 6.8%. What will India's GDP be in 10 years?
A.   $570,759,161 USD
B.   $5.2 trillion USD
C.   $483.6 trillion USD
D.   $2,250,659,474 USD
Question #7
When |E| > 1, indicating a high responsiveness of quantity demanded to changes in price, demand is said to be
A.   perfectly inelastic
B.   elastic
C.   inelastic
D.   perfectly elastic
Question #8
How might the unemployment rate be understated?
A.   more women join the workforce
B.   seniors come out of retirement and return to work
C.   full time students graduate from school and find work
D.   unemployed people may become discouraged and stop looking for work
Question #9
Which of the following choices would lead to an increase in human capital?
A.   investments in infrastructure
B.   investments in healthcare
C.   investments in the military
D.   investments in small businesses
Question #10
The real GDP of Coruscant is $715 billion and nominal GDP is $785 billion. Calculate GDP deflator.
A.   109.8
B.   91
C.   1.097
D.   0.91
Question #11
Which of the following can lead to capital deepening?
A.   trade wars
B.   corruption
C.   good rule of law
D.   poor rule of law
Question #12
How might sticky wages keep the unemployment rate high?
A.   sticky wages quickly adjust during a recession
B.   sticky wages are flexible
C.   wages cannot adjust when the economy slows
D.   sticky wages automatically adjust during a recession
Question #13
Which measures how responsive quantity demanded is to changes in price?
A.   income elasticity of demand
B.   income elasticity of supply
C.   price elasticity of supply
D.   price elasticity of demand
Question #14
The Industrial Revolution gave rise to all of the following except
A.   pollution
B.   collective bargaining
C.   manufacturing towns
D.   military jobs
Question #15
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.   0.103%
B.   0.185%
C.   10.3%
D.   18.5%
Question #16
Which of the following statements is true about GDP?
A.   GDP includes illegal drugs
B.   GDP includes government purchases
C.   GDP includes second hand goods
D.   GDP counts goods made outside of the country
Question #17
Which of the following can lead to higher labor productivity?
A.   poor education system
B.   low wages
C.   technological advancements
D.   poor working conditions
Question #18
Why is real GDP a better measurement than nominal GDP when comparing different years of data?
A.   real GDP adjusts for inflation
B.   real GDP includes imported goods
C.   real GDP includes government purchases
D.   nominal GDP adjusts for inflation
Question #19
Income rises by 10% and quantity demanded falls by 22%. What is the income elasticity of demand and what type of good is this?
A.   normal good, |E| = 2.2
B.   inferior good, |E| = 0.455
C.   normal good, |E| = 0.455
D.   inferior good, |E| = 2.2
Question #20
Who is considered not in the labor force?
A.   self employed people
B.   full time students
C.   full time employees
D.   unemployed people looking for work
Question #21
Convergence occurs when low-income countries grow at ______________ rate than high-income countries
A.   a slower
B.   the same
C.   a decreasing
D.   a faster
Question #22
There are 7.4 million people unemployed and 32.6 million employed with an adult population of 71.7 million people. What is the labor force participation rate?
A.   0.56%
B.   55.8%
C.   10.3%
D.   45.5%
Question #23
Which is likely to have an inelastic supply?
A.   antique clock
B.   a calculator
C.   a watch
D.   digital clock
Question #24
How might unemployment benefits keep the unemployment rate high?
A.   unemployed people receive a paycheck to help pay for living expenses
B.   when unemployed people are receiving a paycheck, there is no incentive to find work
C.   unemployed people may become discouraged and stop looking for work
D.   unemployed people try to find work quickly

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