Devry ECO 312 Final Exam Latest

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Devry ECO 312 Final Exam Latest

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Question 1. 1. (TCO 1) When a state government chooses to build more roads, the required resources are no longer available for spending on public education. This dilemma illustrates the concept of (Points : 4)

production expenses.

unemployment issues.

unintended consequences.

opportunity cost.

Question 2. 2. (TCO1) Which is not a factor of production? (Points : 4)

Money

Land

Labor

Capital

Question 3. 3. (TCO1) A point on the production possibilities curve is (Points : 4)

attainable and resources are fully employed.

attainable, but resources are unemployed.

unattainable, but resources are unemployed.

unattainable and resources are fully employed.

Question 4. 4. (TCO1) A basic characteristic of a command system is that (Points : 4)

wages paid to labor are higher.

government owns most economic resources.

free markets are never permitted in a command economy.

government planners play a limited role in deciding what goods will be produced.

Question 5. 5. (TCO 2) The demand curve is a representation of the relationship between the quantity of a product demanded and (Points : 4)

supply.

wealth.

price.

income.

Question 6. 6. (TCO 2) A decrease in supply and a decrease in demand will (Points : 4)

increase price and affect the equilibrium quantity in an indeterminate way.

decrease the equilibrium quantity and decrease price.

increase the equilibrium quantity and affect price in an indeterminate way.

decrease the equilibrium quantity and affect price in an indeterminate way.

Question 7. 7. (TCO 2) You are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than one. To increase total revenues, you should (Points : 4)

increase the price of the software.

decrease the price of the software.

hold the price of the software constant.

increase the supply of the software.

Question 8. 8. (TCO 2) The price elasticity of demand increases with the length of the period considered because (Points : 4)

consumers’ incomes will increase over time.

the demand curve will shift outward as time passes.

all prices will increase over time.

consumers will be better able to find substitutes.

Question 9. 9. (TCO 2) A profit-maximizing firm in the short run will expand output (Points : 4)

until marginal cost begins to rise.

until total revenue equals total cost.

until marginal cost equals average variable cost.

as long as marginal revenue is greater than marginal cost.

Question 10. 10. (TCO 2) Which case below best represents a case of price discrimination? (Points : 4)

Question 12. 12. (TCO 3) The main difference between the short run and the long run is that (Points : 4)

firms earn zero profits in the long run.

the long run always refers to a time period of one year or longer.

in the short run, some inputs are fixed.

in the long run, all inputs are fixed.

Question 13. 13.

(TCO 4) Refer to the diagram. The phases of the business cycle from points A to D are, respectively:

Graph Description

(Points : 4)

Peak, recession, expansion, trough

Trough, recovery, expansion, peak

Expansion, recession, trough, peak

Peak, recession, trough, expansion

Question 14. 14. (TCO 4) Official unemployment rate statistics may (Points : 4)

Question 17. 17. (TCO 6) The goal of expansionary fiscal policy is to increase (Points : 4)

the price level.

aggregate supply.

real GDP.

unemployment.

Question 18. 18. (TCO 6) Refer to the graph. What combination would most likely cause a shift from AD1 to AD2?

Graph Description

(Points : 4)

Increases in taxes and government spending

Decrease in taxes and increase in government spending

Increase in taxes and no change in government spending

Decreases in taxes and government spending

Question 19. 19. (TCO 6) The American Recovery and Reinvestment Act of 2009 included mostly (Points : 4)

increases in taxes and government spending.

decreases in taxes and government spending.

increases in government spending and decreases in taxes.

decreases in government spending and increases in taxes.

Question 20. 20. (TCO 6) If people expected that a tax cut was temporary, then this fiscal policy’s effect on the economy will tend to be (Points : 4)

stronger.

weaker.

the exact opposite of what was intended.

as the multiplier effect would predict.

Page 2

Question 1. 1. (TCO 5) A decrease in government spending will cause a(n) (Points : 4)

increase in the quantity of real domestic output demanded.

decrease in the quantity of real domestic output demanded.

decrease in aggregate demand.

increase in aggregate demand.

Question 2. 2. (TCO 5) The long-run aggregate supply curve is (Points : 4)

upward-sloping and becomes steeper at output levels above the full-employment output.

upward-sloping and becomes flatter at output levels above the full-employment output.

horizontal.

vertical.

Question 3. 3. (TCO 5) Which would most likely increase aggregate supply? (Points : 4)

An increase in the prices of imported products

An increase in productivity

A decrease in business subsidies

A decrease in personal taxes

Question 4. 4. (TCO 5) Deflation refers to a situation where (Points : 4)

price level falls.

price level rises.

the rate of inflation falls.

the rate of inflation rises.

Question 5. 5. (TCO 6) If a family’s MPC is .7, it means that the family is (Points : 4)

operating at the break-even point.

spending seven-tenths of any additional income.

necessarily dissaving.

spending 70 percent of its disposable income.

Question 6. 6. (TCO 7) Which definition(s) of the money supply include(s) only items which are directly and immediately usable as a medium of exchange? (Points : 4)

M1

M2

Neither M1 nor M2

M1 and M2

Question 7. 7. (TCO 7) Which of the following “backs” the value of money in the United States? (Points : 4)

Gold stored in the Federal Reserve Bank of New York

Acceptability of it as a medium of exchange

Willingness of foreign government to hold U.S. dollars

Size of the budget surplus in the U.S. government

Question 8. 8. (TCO 7) The Federal Reserve System of the U.S. is the country’s (Points : 4)

financial adviser.

comptroller or accountant.

central bank.

deposit insurance provider.

Question 9. 9. (TCO 7) Which group is responsible for the policy of changing the money supply? (Points : 4)

Federal Open Market Committee

Office of Management and Budget

Thrift Advisory Council

Federal Advisory Council

Question 10. 10. (TCO 7) Money is “created” when (Points : 4)

a depositor gets cash from the bank’s ATM.

a bank accepts deposits from its customers.

people receive loans from their banks.

people spend the incomes that they receive.

Question 11. 11. (TCO 7) During the financial crisis of 2007-2008, the FDIC increased deposit insurance coverage from (Points : 4)

$50,000 to $100,000 per account.

$100,000 to $250,000 per account.

$200,000 to $500,000 per account.

$500,000 to $1,000,000 per account.

Question 12. 12. (TCO 7) Which one of the following is a tool of monetary policy for altering the reserves of commercial banks? (Points : 4)

Issuing currency

Check collection

Open-market operations

Acting as the fiscal agent for the federal government

Question 13. 13. (TCO 7) The most frequently used monetary device for achieving price stability is: (Points : 4)

open market operations.

the discount rate.

the reserve ratio.

the prime interest rate.

Question 14. 14. (TCO 8) Which country is the United States’ largest trading partner in terms of volume of trade? (Points : 4)

Mexico

Japan

China

Canada

Question 15. 15. (TCO 8) Nation X has a comparative advantage in the production of a product compared to Nation Y when (Points : 4)

it imposes a tariff on the importation of the product.

its production possibilities curve expands, allowing it to produce more of the product.

it is achieving full employment and is producing the maximum amount of the product.

it has the lower domestic opportunity cost of producing the product.

Question 16. 16. (TCO 8) An excise tax on imported commodities is known as a(n) (Points : 4)

quota.

tariff.

export restriction.

price ceiling.

Question 17. 17. (TCO 8) If a nation agrees to set an upper limit on the total amount of a product that it exports to another nation, then this situation would be an example of (Points : 4)

an import quota.

a revenue tariff.

a protective tariff.

a voluntary export restriction.

Question 18. 18. (TCO 8) The major beneficiaries of a tariff on a product are the (Points : 4)

domestic producers of the product.

domestic consumers of the product.

workers engaged in trade, like transportation workers.

foreign producers of the product.

Question 19. 19. (TCO 8) Which organization meets regularly to establish rules and settle disputes related to international trade? (Points : 4)

The United Nations Commission on Trade Law

The United Nations Conference on Trade and Development

The World Trade Organization

The Federal Reserve Board

Question 20. 20. (TCO 9) U.S. businesses are demanders of foreign currencies because they need them to (Points : 4)

produce goods and services exported to foreign countries.

pay for goods and services imported from foreign countries.

receive interest payments from foreign governments.

receive interest payments from foreign businesses.

Page 3

Question 1. 1. (TCO 9) In the balance of payments statement, a current account surplus will be matched by a (Points : 4)

capital and financial accounts deficit.

capital and financial accounts surplus.

trade deficit.

trade surplus.

Question 2. 2. (TCO 9) If the United States wants to regain ownership of domestic assets sold to foreigners, it will have to (Points : 4)

increase domestic consumption.

increase its national debt.

export more than it imports.

import more than it exports.

Question 3. 3. (TCO 9) Foreign exchange rates refer to the (Points : 4)

price at which purchases and sales of foreign goods take place.

movement of goods and services from one nation to another.

price of one nation’s currency in terms of another nation’s currency.

difference between exports and imports in a particular nation.

Question 4. 4. (TCO 9) When the exchange rate between pounds and dollars moves from $2 = 1 pound to $1 = 1 pound, we say that the dollar has (Points : 4)

depreciated.

appreciated.

inflated.

deflated.

Question 5. 5. (TCO 9) The monetary system for conducting international trade is usually described as a system of (Points : 4)

fixed exchange rates.

freely floating exchange rates.

a managed gold standard.

managed floating exchange rates.

Question 6. 6. (TCO 8) a) Define the four basic types of trade barriers. b) Who gains and who loses from a protective tariff? Explain. (Points : 40)

Question 7. 7.

(TCO 6) a) Identify the four m

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Devry ECO 312 Final Exam Latest

Best Devry ECO 312 Final Exam Latest

Devry ECO 312 Final Exam Latest