ECON 312 WEEK 8 FINAL EXAM

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ECON 312 Week 8 Final Exam

1.

(TCO 1) Opportunity cost is best defined as (Points : 4)

2.
3.

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

(TCO1) A point outside the production possibilities curve is (Points : 4)

4.
5.

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

(TCO 2) Which is consistent with the law of demand? (Points : 4)

6.
7.

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

(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)

8.

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

9.
10.

(TCO 2) A profit-maximizing firm in the short run will expand output (Points : 4)
(TCO 2) Which case below best represents a case of price discrimination? (Points : 4)

11.
12.

(TCO 3) A major reason that firms form a cartel is to (Points : 4)

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

13.
14.

(TCO 4) A recession is a decline in (Points : 4)

(TCO 4) The unemployed are those people who (Points : 4)

15.
16.

(TCO 4) GDP is the market value of (Points : 4)

(TCO 4) Nominal GDP differs from real GDP because (Points : 4)

17.

(TCO 6) When the federal government uses taxation and spending actions to stimulate the
economy it is conducting (Points : 4)

18.

(TCO 6) Refer to the graph. What combination would most likely cause a shift from AD1 to
AD3?

19.
20.

(TCO 6) The American Recovery and Reinvestment Act of 2009 included mostly (Points : 4)
(TCO 6) The lag between the time the need for fiscal action is recognized and the time action

is taken is referred to as the (Points : 4)

21.
(TCO 5) A decrease in government spending will cause a(n) (Points : 4)
22.
23.

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

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

24.

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

25.
26.

(TCO 6) Dissaving occurs when (Points : 4)

(TCO 7) The M1 money supply is composed of (Points : 4)

27.
28.

(TCO 7) The basic requirement of money is that it be (Points : 4)

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

29.

(TCO 7) Which of the following is the most important function of the Federal Reserve
System? (Points : 4)

30.
31.

(TCO 7) Money is "created" when (Points : 4)

(TCO 7) During the financial crisis of 2007-2008, the FDIC increased deposit insurance

32.

coverage from (Points : 4)

(TCO 7) The purchase and sale of government securities by the Fed is called (Points : 4)

33.
34.

(TCO 7) The Federal Reserve could reduce the money supply by (Points : 4)
(TCO 8) Which country is the United States' largest trading partner in terms of volume of

trade? (Points : 4)
35.
(TCO 8) The principal concept behind comparative advantage is that a nation should
(Points : 4)
36.
(TCO 8) A tariff is a (Points : 4)
37.
38.

(TCO 8) Tariffs and quotas are costly to consumers because (Points : 4)

(TCO 8) Tariffs and import quotas would benefit the following groups, except (Points : 4)

39.

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

40.

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

41.

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

42.
43.

(TCO 9) A trade deficit means a net (Points : 4)

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

44.

(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)

45.

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

46.

(TCO 8) a) Explain four problems with the argument that trade protection is needed to
protect American jobs. b) Describe the economic reasons why businesses use off shoring.

47.

(TCO 6) a) Identify the four major tools of monetary policy. b) How can monetary policy
address the problem of inflation?