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Eco 372 Final Exam Latest Uop Complete Course Tutorials

1585 words - 7 pages

ECO/372 Final Exam

1. News Story: Workers at a car-manufacturing plant in Flint, Michigan are
laid off because the economy is weak and GM cars aren't selling well. GM
isn't sure when the plant will reopen. What type of unemployment
describes the workers' situation?

Frictional unemployment

Structural unemployment

Full unemployment

Cyclical unemployment

2. Globalization that allows governments to pursue expansionary policies
can be dangerous because it can lead to:

A reduction in the debt ceiling

Goods price inflation

Asset price inflation

Goods price deflation

Complete Answers here ECO 372 Final Exam

3. ...view middle of the document...

They have the same effects on output but investments in technology are
much more closely tied to the level of saving than investments in capital.

They have different effects on output because of the positive externalities
associated with investments in capital.

They have different effects on output because of the positive externalities
associate with investments in technology.

8. The interest rate is the price paid for use of a:

Real asset.

Financial liability.

Financial asset.

Real liability.

Click here to download Complete Answers of ECO 372 Complete Course

9. If the reserve requirement is 20 percent, and banks keep no excess
reserves, an increase in an initial inflow of $100 into the banking system
will cause an increase in the money supply of:

$50

$100

$500

$20

10. Suppose farmers can use their land to grown either wheat or corn. The
law of supply predicts that an increase in the market price of wheat will
cause:

Farmers to substitute wheat for the production of corn.

Farmers to raise the production of corn and wheat.

Farmers to lower the production of corn and wheat.

Farmers to substitute corn for the production of wheat.

To download the complete answer check ECO 372 Final Exam Test

11. According to Keynes, why might deflation create problems for an
economy?

In expectation of increased spending, too many entrepreneurs would
begin businesses and most would fail.

The cost of repricing goods would increase costs, and therefore reduce
profits, for businesses and they would cut production.

People would drop out of unions because unions would become
ineffective at keeping wages of members high.

Consumers might expect prices to fall further and cut back consumption
now.

12. When interest rates rise, people are:

More likely to borrow, that is, purchase a financial asset.

More likely to borrow, that is, sell a financial asset.

Less likely to borrow, that is, sell a financial asset.

Less likely to borrow, that is, purchase a financial asset.

Quiz Answers just a click away ECO 372 Entire Course

13. According to the Classical growth model, an economy that increases its
saving will grow:

Quickly since the increase in saving will permit greater investment.

Quickly since the increase in saving will permit more rapid technological
progress.

Slowly because interest rates will fall, causing investment to decline.

Slowly because consumption and aggregate demand will be reduced.

14. Suppose that consumer spending is expected to decrease in the near
future. If output is at potential output, which of the following policies is
most appropriate according to the AS/AD model?

A reduction in government spending

An increase in taxes

An increase in government spending

No change in taxes or...

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